Leasing a car takes off your shoulder the burden that often comes with buying a vehicle outright, especially when it comes to things like seeking financing, getting approved for the loan, getting comprehensive coverage, and barnstorming the offices of local dealerships. Leasing is not a straightforward exercise, but you can understand it if you take things one step at a time and familiarize yourself with the most frequently asked questions. One thing you also should understand is the difference between leasing and buying along with the pros and cons of each alternative.
Can I Negotiate Parts of the Lease Agreement?
Of course, you can. First and foremost, pay attention to the vehicle's price. If you feel that the price is much higher than what you can get elsewhere, express your dissatisfaction to the dealer and tell him or her that you will take your business elsewhere if you cannot get competitive prices. But just don't make vague or baseless threats, though. Print the prices you see when shopping online and show them to the dealer so he or she can see that you did your homework.
Note, however, that the dealer is only acting as an agent for the leasing company, so he or she may not have much say in discussions or negotiate other sections of the lease agreement. These include money factor, down payment, residual value, acquisition fee, and security deposit.
But, again, if you threaten to take your business elsewhere, I'm sure the car dealer would find a quick way to relay that frustration to the leasing company, and both the company and the dealer would get back to you as soon as possible.
Can I Rescind a Lease Agreement if I No Longer Want It?
Contrary to popular belief, there is no such thing as a 3-day window within which you can return to the leasing agency-and/or the dealer, for that matter-and say you want to rescind your contract. There's no money back guarantee here, and your only prayer should be that the leasing agency or car dealer understand your motives. The best way to avoid this scenario is to discuss beforehand your options if you want to cancel your agreement within a specific time frame.
Do I Pay Sales Taxes on My Car Lease?
An auto lease is a transaction as any other financial deal, so the concept of sales tax applies. Check with your leasing agency to get more information about the rules in your state. Some jurisdictions want the lessee-that is, you-to add the sales tax on each monthly lease payment, whereas it is not uncommon to see other states, such as Texas, requiring that the lessee pay the total amount of sales taxes upfront.
What are the Pros and Cons of a Down Payment in a Lease Transaction?
For starters, the larger down payment you make, the lower your monthly payments over the lease term. Second, you eliminate or substantially reduce the expense of early termination. Third, you have better odds of getting a good lease deal because most ads you see on TV or hear on radio typically ask for a down payment, something to which most people don't pay attention to or don't hear because the announcer quickly reads the fine prints. A drawback for making a down payment is that you will not get your money back if disaster strikes and your car is totaled in an accident, or stolen.
Does my Credit Score Affect My Chances of Getting a Good Car Lease?
Absolutely, and I would say it again: absolutely. A car lease is a financial transaction, similar to a financing agreement. Therefore the leasing agent would dive deep into your credit file to understand your payment and spending patterns over the last, say, five to 10 years. Remember, the leasing organization is entrusting you with its car, so it makes sense that the company, at a minimum, takes a look at your credit file. To avoid the kind of frustration that comes with a lease application rejection, pay attention to your credit history every now and then. Take a look at your credit score before leasing.
Before leasing a car, familiarize yourself with the intricacies of leasing a vehicle versus buying an automobile or taking out an auto loan. By doing your homework in advance and seeking answers to frequently asked questions, you gradually plant the seeds of a quicker lease deal approval and before you know it, you are already off the dealer's premises, enjoying your favorite car.