3 Extremely Useful but Little-Known Auto Leasing Tips
Leasing is attractively customizable and convenient, overall. It's a convenient financing option for every driver. That's not to say that it doesn't have any downsides, though. Fees, deadlines and complex financing are a few things that can cause anxiety. The good news is that there are ways to avoid the headaches. Take a few minutes to read this article and save yourself some time and money.
1. You Can Go Month-to-Month at End Term (But There's a Catch)
Lessees have three options when a lease is over. They can purchase the leased vehicle, they can turn it in and leave, or they can turn it in and lease another vehicle. That decision can be rather difficult. It's important to plan ahead so you have a plan on the day your lease expires.
If worse comes to worst, just extend the lease for another month. Most leasing companies allow this. However, buying the car after extending the contract on a month-to-month basis can lead to paying more than you should. This is because the car will be sold to you at a pre-negotiated price, based on the original lease period. When you drive the car for an extended period, its value decreases further, to a lower value than the one you negotiated. You can discuss this with your dealer but, as a general rule, try not to extend the lease more than a month.
2. Waive the Acquisition Fee
Fees are one of the few downsides to leasing. Some brands come with more fees than others. All fees seem inconvenient and a little unnecessary. But there is a way you can have the acquisition fee waived, according to Edmunds.
Once you've negotiated your rate, ask the dealer if any fees can be waived. Obviously, it helps to be persuasive, here. If the answer is "no," offer to pay a higher interest rate on the condition that the acquisition fee will be waived. Jumping to the next tier in interest rates won't increase your monthly rate much. Calculate the total you'll pay for the higher interest and subtract it from the fee amount to find out how much you will save. This may not always work out, but its worth a try.
3. There's (Sort of) a Way to End Your Lease Early
A lease is a contractual agreement that requires the lessee to make payments for a number of months, usually around 36. If he can't meet the requirements, it can be damaging to his credit score. One way to avoid that situation is to find someone who will assume the lease. This practice is sometimes called a "lease transfer." About 80% of leases allow it. Before you sign a contract, ask your dealer if it will be allowed, just in case. In about 20% of cases, the original lessee will retain liability for the payments and charges, even after the car is transferred. That's not an ideal situation to be in, as the original lessee.
On websites like LeaseTrader, lessees can list the leased vehicles they no longer want (or can't afford). The website provides the paperwork for both parties and charges a fee to help with the process. The advantage to the second lessee is a shorter lease period at the same rate. It's a win-win.
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