Leasing cars is not the cheapest way to drive an automobile, but it can be the best option in certain cases. For example, if you intend to upgrade to a better model frequently, you would be better off leasing a vehicle as opposed to purchasing and selling them. There are several tips and tricks you can use to lower the cost of your car lease. Here are some of the most important:
Negotiate the Price of the Car as if You Were Going to Buy It
Leasing cars can be an expensive option for those who don’t know how to negotiate. You should approach the price negotiation as if you were going actually to buy it. It is common knowledge that you would have less leverage when leasing a car, and this might affect your bargaining power. For this reason, you should only let the dealer know that you intend to lease after you arrive at a suitable purchase price. This way, you will be able to get the lowest price they can afford to give. Also, you should get quotations from reputable dealerships such as Intelligent Car Leasing before making your final decision.
Negotiate the Mileage Limit, Down Payment, and Purchase-option Price
Most car salesmen are likely to focus on your monthly payments, and this can distract you from the down payment. It is important to make sure you pay as little money as possible upfront since this can lead to significant losses. In case the car crashes or gets stolen, you are likely to end up with a lot of money lost, and you will also not have a car.
When leasing a car, you will also have to agree on the mileage limit. If you are always on the road, you should go for a higher limit as this will be cheaper than paying extra for exceeded miles. If you have to prepay, you can have them refund you for any additional miles that you didn’t use. Also, find out if the dealership offers a purchase-option price. This can be advantageous if you choose to buy the car at the end of the lease.
Buy GAP Insurance
Guaranteed Auto Protection (GAP) insurance will cover your costs in case your car gets totaled before the end of your lease. The insurance will pay the difference between your loan and the value of the vehicle. It is important to note that GAP insurance will not cover your costs if you lose your job or get disabled.
Look for Cars That Don’t Depreciate Faster Than Average
The car you lease is bound to depreciate over the years. However, some vehicles lose their value at a faster rate, and that means you will be paying a lot more for the car. Even with low monthly costs, you will still be paying more than the car is worth at the end of the lease. Also, vehicles that depreciate at a rapid pace are not dependable.
Avoid Leases That Extend Beyond the Car’s Factory Warranty
Factory warranties are meant to cover any costs you may incur from normal wear and tear, accidents and other forms of damage. Usually, these warranties last for about three years and can never be renewed. You will, however, have the chance to get extended warranties from third parties. Without the warranty, you will have to cover the repair costs yourself.
Leasing a car can be an excellent option for those who don’t like the hassle of maintaining a vehicle or reselling it in future. It also works well for people who want to switch models now and then. These tips and tricks should help you save money on your car lease. You can read and subscribe to this blog if you want to learn how to make better financial decisions.