7 Ways Negotiating a Car Lease can be CONFUSING

7 Ways Negotiating a Car Lease can be CONFUSING and what you can do to better prepare yourself before signing a deal on your next new car lease.

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1. Why two cars can be identical in price but have drastically different lease payments. This has a lot to do with how much the car is depreciating over the course of the lease, in other words what the residual of the car is, AND how much in incentives are being offered by the manufacturer to help sell it. Typically a car that is harder to sell will lease out a lot more attractively because it’s getting some help from the manufacturer in the form of rebates.
2. Selling Price before rebates. How much money is being discounted by the dealer, and how much by the manufacturer. Large chunks come from the manufacturer and that can confuse you because the dealer may try to take credit for the discount and STILL sell the car to you for full price.
3. Taking a verbal estimate on miles per year is not safe. If you agree to 12k miles at $25 more a month, when the difference is $12.50, that just added back $450 in profit back to the dealer.
4. A more expensive car is not THAT much more expensive. Because you’re only paying for a portion of the car, you’d only be paying for the portion of the difference of the more expensive car. If the residual of the car is 50%, that means you are only using 50%, so if the more expensive car is $2,000 more, that would only cost you $1,000 more plus tax/interest.
5. Interest is not called APR. it’s called a Money Factor and it’s typically never disclosed. You might think it’s charged on the portion of the amount your using when in fact, it’s that, PLUS the residual of the car. To know what the APR equivalent is, multiply Money Factor x 2400. It will give you the APR.
6. On that topic, you may have been quoted a payment initially, and it changed as soon as you went to go complete the deal. This is because of your credit score. Just like a high interest rate on a car loan, your credit score will determine how much more interest the bank will add to your lease payment. This is called a Tier Approval, and if your credit is not above 720, expect advertised lease payments to change.
7. Speaking of advertised lease payments. So most of the time when you see $2000 down being advertised, that’s always going to be in addition to all the fees charged by both the bank and the dealer. As a good rule of thumb, every thousand being put down or taken away will make the payment fluctuate $30 dollars. If you are being quoted $4,000 down, and decide to remove it and do $0 down, your new payment would now be about $120 higher because the $4000 is being divided into your 36 payments.

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Видео 7 Ways Negotiating a Car Lease can be CONFUSING канала Ari Janessian