Top 3 things you need to know when leasing a carDeals The List
Car leasing is bigger than ever, making up more than 30 percent of the U.S. automotive market. If you like being in new cars most of the time, leasing is probably for you. Jimmy Rhoades and NerdWallet’s Philip Reed have three important tips to know before you hit the dealership.
1. Design Your Lease
Never lease for longer than three years because if you do, you'll be outside of the warranty that comes with the car. Also, don't pay for something that's already included and cap the amount you put down at signing. Put down around $1,000 for drive-off fees. It puts your money less at risk and it frees it up for cash flow which is one of the benefits of leasing. Know how much you drive so you get enough mileage. The penalties can be a killer!
2. Shop the Specials
Manufacturers sometimes will offer very heavy incentives to steer people toward leasing. They will offer lease cash, or low monthly payments and sometimes zero drive-off fees. If you go to the manufacturers' websites, under the specials you can sometimes find some really amazing offers. While you're online, head to the leasing forums at Edmunds and Leasehackr. You'll find valuable information about residuals and interest rates, contacts at dealerships and gain really powerful negotiating information.
3. Keep the Deal Clean
Make sure that you avoid any unnecessary extras like warranties that protect you from extra charges at the end. If you take good care of your car, you're probably not going to need these. When the bottom line doesn't resemble the number you negotiated ask for a line-item print-out. Understand all the fees that are being included. Ask for those fees to be listed up front before you agree to the deal. If the dealer can't justify the line item then have it removed or threaten to walk.
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