Kadenx

Thought I'd share...

Best leasing practices: If you decide leasing is the way to go (i hate em) then remember 1 thing; you arent responsible for the residual!! You want the residual as high as possible which is a set value by the lending institution. Stuff like cd players, navigation, heated seats, and sunroof's all add to the residual value. Since the residual is going to be higher, you actually pay less in depreciation. Since you pay depreciation in a lease, that means a lower or similiar monthly payment for a better equipped vehicle.

Edmunds invoice prices are pretty accurate however, Kelly blue book values are inflated. Dealers dont use KBB, they use the black book. Arm yourself with a trust edmunds invoice and let the negotiation begin.

Interest: The interest rate is ALWAYS negotiable. Always make sure to get a fixed rate simple interest. Since simple interest is calculated on the principle (what you still owe) the more you pay monthly, the less you pay in interest. Making $10 or $20 payments more a month could allow you to pay off almost a year early. When doing this, you MUST tell (in writing) the bank to apply the overage to principle, otherwise they apply it to interest!

If you are trading a car in, dont take it to a dealership that has 10 of the same kind of car that you are trading on the used car lot, you will likely get shafted. Dont trade a convertible in during the winter.. Again, you will get shafted.

Always have outside finaning. Never use a dealership's financing unless they are running a special like 0% or something fo that nature. Make sure you are qaulified for that special rate before you negotiate. If you dont qualify, get an outside lender to fund your deal, that way the dealer cant mark your rate up. The dealer will usually match your outside rate anyway or they may be able to beat it. If you have an outside rate, ask the dealer to beat it, not match it. If they match the rate, it does you no good so if the dealer cant beat the rate, use the ouside funder's rate. Sometimes, the dealer is simply holding out till the last second to beat the rate and waiting for you to give in.

I have some power points and glossaries of terms and calculations if you are interested. PM me for details

CivicsRdBest

great info...

Leasing however isn't always the best option for everyone. There are some pro's and cons to leasing.

Pro's:
-You don't own the vehicle
-You get to keep it for a while and pay a little money
-You must either return it or find a buyer

Con's:
-You don't own the vehicle
-You don't get to keep it when the lease is over
-You pay for extra mileage

Kadenx

Yes, leasing is only good for those that want to keep a new car and understand that their payments will always be recurring like the electricity or groceries.

Let me make 1 correction.
There are two types of lease's
1. open ended lease: This is a lease in which the buyer assumes all the responsibility of the residual at the end of the lease term. In this lease it is the buyer that is responsible for "getting rid" of the car. The bank requires money, not the car.

2. closed ended lease: This is a lease in which the lienholder assumes all the responsibility of the residual at the end of the lease term. In this lease, it is the lienholder that is responsible for "getting rid" of the vehicle after the lease term. The bank gets the car, not the money.