We had a ton of questions about car leases this week, so I'm working on a longer article - but while doing research, I ran across a nice little article "5 Dumb Car Leasing Mistakes To Avoid" on the website www.bankrate.com. For this entry I'm going to address the great points the article raises, and show you how we help you avoid those mistakes at my dealership. (Read the article first - it's not very long.)
Mistake #1 - Paying Too Much Money Up Front
In order to get you in to look at their cars, companies will try almost anything - and in this particular version of the game - the company will take one of their least expensive models, set the mileage at the lowest possible, tell you that you need to put down a couple of thousand dollars - but then distract you from the part telling you that it also requires you make the first payment and that you still need to pay for taxes and license, or some other nonsense. (If one of those deals looks too good to be true - find and read the fine print - it probably is too good to be true.)
There are a number of variables that come into a lease, but when we write up a lease, we work hard to be as transparent as possible - we don't want you to have any surprises. And, if your credit score allows, we'll write your lease with nothing down, nothing due, and no payment for 30 days.
Mistake #2 - Forgetting Gap Insurance
There's no real way around the fact that your new car depreciates as soon as it goes off the lot. If you get in a wreck and total the car, your insurance company is going to pay you what the car is worth, not what you owe. The difference between those two numbers is the "gap". We have Gap Insurance already built into the leases we write - so this isn't going to be an issue for you.
Mistake #3 - Underestimating Miles You've Driven
It would be a good idea to do a little research on this prior to agreeing on a mileage number with the dealer. One of the easiest ways to estimate your mileage is to check your last oil change receipt. How many miles have you gone since your last oil change? How long has it been since your oil change - use those numbers to estimate how much you actually drive. If you go over on your miles, you will have used up more of the service life of the vehicle, you're going to have to make up the difference.
One thing - some articles make it sound like lease contracts are tricking you by charging you more for a lease with more miles. ??? How does that make sense? You're buying more of the life of the car, so of course it's going to cost you more.
Mistake #4 - Not maintaining the car
At the end of your contract, your leasing company is expecting to get back a car that still has value. They will expect the tires to still have a lot of miles left on them, they'll expect that the windshield will be intact, with no chips or cracks, and they'll expect the interior and exterior to be in good condition.
Of course you should maintain your car - but if you know that at the end of three years you're going to want to trade up for another new car under warranty, you may want to consider a Wear/Care insurance policy. With the wear/care policy we offer, you can bring the car back with bad tires, chips in the glass, and dings in the doors, and we'll just smile and accept your keys. (I don't know if it's typical, but with one recent customer we figured out that the wear/care insurance would actually be cheaper that buying a new set of tires.)
Mistake #5 - Leasing For Too Long
One of the real selling points of a 3 year, 36,000 mile lease, is that the car will always be under warranty. That doesn't work for everyone, and so longer leases, with more miles are an option. You just need to know that you will be responsible for anything not covered by the warranty.
At our dealership we can cover you with a State Farm* "wrap" warranty, and extend your protection for just about any length of time, or number of miles. So if you need to lease your vehicle for 4 years, and don't want to worry about paying for unexpected repairs, we've got a solution for you.
*Accepted anywhere in the USA and Canada