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How to spot a good car lease. |
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Written by Dawn C.
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Monday, 09 October 2006 |
Leasing has been lauded as your cheapest ticket to keep up with the industry's hottest vehicles and trends. The jury, nonetheless, is still out on leasing: alongside the industry long extensive on hype and short on technicality, it is difficult to distinguish between a really good deal and a plain up-selling exercise.
So how do you spot a fair deal'
Foremost, you need to find out if there are any down payments on the sublease. A
down payment refers to the lump sum total that you pay upfront, either in
money, non-cash credit or trading allowing, to reduce your monthly fee.
You should think twice before putting money down on a lease: not only are
you getting a irregular deal, as you're essentially forfeiting the common rule
of leasing: not putting any cash upfront, but the money is not recoupable
at the end of your sublease. There is another big disadvantage: in the occurrence
of your car getting damaged or stolen, your insurance and the gap cost will
not protect the loss.
Mileage Limit
Most leasing companies grant you a restriction of 45,000 free miles on top of the
length of a 3-year lease. This may seem equivalent to a good deal at first sight,
but when you consider it just comes to 15,000 miles over a 12 month period
it's not difficult to foretell why it might be difficult to stop within this
limit. Although people working from residence have slight trouble putting 15,000
miles on their cars. If you exceed the mileage limit, the penalty for each excess mile can be as high as 20 cents. This can add up quickly on top of the length of your lease: an additional 4,000 miles a year above the extent of a 3-years sublet contract,
will end up costing you an extra $2,400 in excess mileage charges!
Be realistic about your mileage needs, specifically if you have to regularly
commute over long-distances, before you sign the agreement. Consider padding
the miles that you contemplate to use since it is less costly to agreement for
the extra before you sign than it is to pay the additional charges at end of
your sublease.
Sales Tax
Sales tax is usually capitalized and added to the monthly payments.
However, various dealers determine not to include it in their calculations to
drive the advertised lease payments even lower. What they do instead is
state in the small proof that the monthly payment excludes sales tax.
Make sure you carefully read the fine imprint for any extra, hidden disbursement not
included in the advertised monthly disbursement. Unscrupulous fees that
in general slip through the cracks include sales tax, registration and name
fees. |