Let’s explain the dangers of auto leasing!
Jeff Bartlett, deputy automotive editor at Consumer Reports
“If you asked me what is the most expensive way to get a car, the answer would be: You only want to own it during its period of greatest depreciation and then move to another new vehicle.” “Well, that’s what leasing is.”
lease noun \ˈlēs\: a legal agreement that lets someone use a car, house, etc., for a period of time in return for payment
Click to Listen
How is the payment calculated?
- Purchase price – how much you pay, you should negotiate just as hard as if you were buying
- Cost of money – interest rate
- Lease term – number of months of the lease
- Residual value – estimated value of what the car will be worth at lease end
- Sales tax – You will only pay taxes on the sum of your payments, which is the difference between the purchase price and residual value.
What is the average lease payment?
Avg auto loan in Q4 2013 $471
Avg auto lease in Q4 2013 $420
What are the gotchas with leasing?
- Paying too much upfront
- Forgetting to buy gap insurance
- Underestimating you miles driven
- Not maintaining the car
- Leasing for too long
What types of auto leases are there?
Closed-end Leases which are mostly consumer leasesOpen-end Leases
Open-end leases are primarily for commercial business leasing.
How do I know if I’m getting a good lease?
Leasify – App to confirm you are getting the best lease. 99 cents.
Leasify is a car lease advisor in your pocket. Leasify levels the automotive playing field by giving you the information you need to get the best deal on your new car lease.
- X-rays lease quotes to extract hidden fees and areas where you can improve your deal
- Serves as a financial decison-making tool with a sophisticated algorithm that generates a deal score
- Displays what the dealer paid, as well as the average price paid, for any car in your zip code
Next week, I’ll be talking about how to get out of a lease if you find yourself in one and want out.
God Bless You!
Auto Leases Entice, but They’re Still Costly: http://nyti.ms/1wfmUju
Merriam-Webster Online: http://www.merriam-webster.com/dictionary/lease
Types of Car Leases – Explained: http://www.leaseguide.com/lease06/
Lease Payment Formula Explained: http://www.leaseguide.com/lease08/
Calculate Your Own Car Lease Payment: http://edmu.in/1x8lzwr
5 dumb car leasing mistakes to avoid: http://bit.ly/1CdUwmq
Experian Automotive report shows auto loans are still first choice in financing, but leasing has become more popular than ever: http://bit.ly/1CtQW8k
Depreciation Infographic: How Fast Does My New Car Lose Value?: http://edmu.in/WELal0
Leasify App: https://itunes.apple.com/US/app/id912884639
Did you enjoy the show?
If you liked this episode, please consider going to iTunes and subscribing.
On iTunes once you subscribe, you can leave a rating and review. Taking this action will help this podcast move up and be more easily found in iTunes. Thank you for an honest rating and review.
Here is a link to subscribe or rate and review the show: http://cashcarconvert.com/itunes
Alternatively, you can let me know your thoughts about the show on Twitter at @CashCarConvert.
Want to connect on Facebook? http://facebook.com/cashcarconvert
Check out my new private Facebook community. http://cashcarconvert.com/cccc
Want to shoot me an e-mail? Click: email@example.com.
Looking for something on Amazon? Please use my affiliate link: http://cashcarconvert.com/amazon
Looking for a back episode of the Cash Car Convert? Click: http://cashcarconvert.com/cash-car-convert/
I’m also posting my audio podcasts on youtube. The first 15 episodes are up with the rest to follow. I’m looking at this as just one more platform to be found. http://cashcarconvert.com/youtube
Do you have a comment about this interview or about the podcast itself? Please leave a comment below.
I appreciate every listener.
Thank you for listening to the Cash Car Convert show.