Leasing is now a very popular and cheap way for keeping up with the auto industry’s hottest trends and vehicles. Unfortunately, it can be difficult to figure out whether you’re going to be getting a good deal or not.
So how do you know if you can get a good deal?
First, you should find out if the lease involves any down payments. A down payment, of course, is a sum that you must pay upfront, either in cash or credit, to lessen the monthly payments. You should think long and hard before you put any money down on a lease; not only will you be getting a rough deal, but you’re also forfeiting the main reason for leasing: not having to put cash upfront. You will not be able to receive money back at the end of the lease. There’s another important reason: should your car ever get stolen, lost, or damaged, neither your insurance nor gap cost will cover the loss.
Mileage Limit:
The majority of leasing companies will allow the limit of 40,000 – 45,000 free miles over the course of a three year lease. This might seem like a great deal at first, but you need to realize that it’s only around 12,000 – 15,000 free miles a year. It may be difficult for you to stay inside this limit. Even those who work from their homes have a bit of trouble keeping their mileage 15,000 within one year.
You may end up paying as much as .20 per one mile that you exceed beyond your limit. This can add up pretty quickly. An addition 3,000 miles a year that you exceed over your limit can equal up to $1,800 extra dollars! 3,000 x 3 years = 9,000 miles. 9,000 x .20 = $1800. You need to be realistic when it comes to mileage needs, especially if your job is quite some distance away from your home. Talk to your leasing company about your options.
Sales Tax
Sales taxes are normally capitalized and tacked on to monthly payments. However, some companies elect not to include it with their calculations so that they can bring down the monthly payments even lower than what they advertise. They only state in very small print in the contract so you need to read the contract very carefully before signing anything. Sadly there are some unscrupulous fees that occasionally slip through the cracks.
