Car leases typically involve short-term loans with an average duration of two to four years. When leasing a car, avoid rushing the financing process in order to quickly get behind the wheel of an amazing new car. Think objectively and approach the lease by asking questions and negotiating. Do not mention that you are interested in leasing until after you discuss the sales price.
Basics
Start by understanding basic finance terminology. For example, APR refers to the annual percentage rate, or interest, your lease will maintain. Even though car dealerships advertise low leasing rates (like a brand new BMW for $300/month), your credit score plays a major role in your ability to get a great lease. Before you consider leasing, clean up your credit report by working with creditors to charge off or settle accounts. Realize that most gimmicks are based on an extremely limited quantity of vehicles. As leases usually involve new car models, it is vital that you detach emotional ties and approach the lease as if you were purchasing a house. Read contracts (especially the fine print). Avoid paying a large down payment. Negotiate for higher mileage limits so that you can drive 14,000 miles a year (instead of the typical 10,000 mile lease limit) without being penalized. Another important factor in getting the best lease is to negotiate the selling price below the MSRP, or manufacturer's suggested retail price.
Dealer
In leasing a car at a dealership, you negotiate with the dealer. But often your lease is actually with an outside lender. If you cannot get preapproved financing, then work with the dealer to lease a car with a low- or no-security deposit, dealer fees and bank fees. Do not simply discuss expected monthly payments. Also ask if the lease includes maintenance plans, such as for oil changes and tire rotations. Evaluate the lease's required insurance coverage so that you are not faced with high premiums since cars depreciate, not appreciate, in value.
Preapproval
A great way to lease a car involves obtaining preapproved financing. Contact a legitimate online lender or a local credit union to find a reasonable loan without excessive fees. Upon receiving financing, you should shop around and evaluate different dealer prices. Never accept a dealer's offer without counteroffering. Unless you are seeking a rare or limited edition car, then you should have a few sources to consider, such as dealerships or independent car leasing companies. A nontraditional way is to assume someone else's lease. Many people enter into leases that they cannot keep so swapping leases can benefit both you and the other party. Evaluate the financial cost and benefit and search for leases with added incentives, such as a financial bonus for assuming a lease.
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