Secret Truths About Leasing

Contracts image courtesy of lejoe

Leasing may seem like a great option for most car shoppers, and there are certainly some benefits.  But hidden amongst these benefits are a few downsides that dealers try to underplay in order to make transactions happen.  Sure monthly premiums tend to be lower and the prospect of a new vehicle loan at the end of the lease may seem fantastic, but these are only part of the equation.  Here are the five secrets of leasing that dealers either will not voluntarily explain or will try their best to downplay:

Secret #1: Modifications Are a No Go

Be sure that you get exactly what you want when you lease because modifying the vehicle is strictly taboo.  This means that you might want to have most forward looking media center and navigation system because any third party modification will result in damage to the vehicle that will cost money upon the termination of the lease.  Worst of all, you will have to replace the upgraded items with the originals, an act that is likely to be expensive, time consuming, and one that will leave you with an extra deck unit laying around doing nothing at the end of the lease!  In short, nothing short of exactly what you like is going to cost you.

Secret #2: You Cannot Always Get What you Want

So, if modifications are not part of the picture it gives us a new question to ask: What can you get?  Well, if you are looking at those fabulous rates then chances are you can only get model combinations that are not selling all that well.  After all, there is reason that the prices are so good.  Getting exactly what you want may be possible, but it will certainly cost more than those amazing adverts in the paper or online say unless you happen to want only what is on offer with no options.

Secret #3: Your ‘Deposit’ Is Not a Deposit

Some vehicle lots refer to the down payment on a lease as a deposit, but the truth is that a deposit in the most common financial sense of the word is something that is returned upon the successful completion of a loan.  In fact, there is a little known truth that we are about to uncover…

Secret #4: You May Owe at the Conclusion of the Lease

The sad truth is that you may end up actually owning money at the conclusion of a lease, but chances are good that you will not get that money back.  Consider the following: if you have miles above and beyond what the lease stipulates, you will pay for each and every one but if you are under the limit you are unlikely to be refunded on them.  The same holds true for returning the vehicle in anything shy of showroom pristine condition; you will pay for every scratch, ding, dent, and scrape.

Secret #5: In Conclusion

At the end of the day you must understand that a lease is a business arrangement.  The dealer is essentially offering you a long-term lease with a substantial down payment to mitigate their risks and reduce your monthly payments.  In return, they expect to receive a used vehicle that they can still sell at a reasonable price at the end of the lease.  Any deficiencies that stop the vehicle from being sold for the expected amount are to be made up for by the signee of the lease if they are anything short of brand-related issues.

Purchasing a vehicle on the other hand means that you are free to do with it as you please so long as it is within the realm of the contract and the law.  You could modify it and receive long-term value, and recuperate some of that value when you sell the vehicle.  Instead of being enticed by low prices at dealerships, look for auto loans online and save a similar amount of money while actually building long term value.

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