You could lease a Honda Fit with no money down for @10 per month. Is it worth it?
If you pay cash for a car and keep it for more than 3 or 4 years, you have beaten the system, but if you finance a car or if you trade often enough that you usually have some kind of car payment leasing might be the best deal for you.
First, you can get more car with a lease. The reason is you are not paying the full price of the car but only for the car for the term of your lease. You will see that even with luxury cars a lease will reduce your monthly payment anywhere from $120 to $200 a month.
You can negotiate a lease and find better deals. You can lower the capitalized cost or the price of the car just as you do when buying a car. The next thing you can negotiate is the interest rate. The lower the better. Finally, you can lower payments by taking a higher residual value as long as you are not planning to purchase the car after the lease is up. These three areas are places where you can talk down the cost of the lease. You should also shop among leasing companies and dealerships for the best deal. Comparison shopping helps here, too.
Since the down turn in the economy, leases are being pushed by dealers. The reason is more people are looking for used cars, lowering the inventory of used cars and raising the price. Dealerships are optimizing their profits, then, with leased vehicles that are turned in because they are a perfect supply for the market demand now.
Only about 20% of the car market is in leases, and one reason is the end-of-lease fees. These are fees that you pay for damage done to the car while you’ve driven it. Sometimes this can cost you up to $800 above the price of the lease. Hint: Take you car in for a $100 detail cleaning and fix small dings. A well-cared for and clean car will reduce any end-of-lease costs.
Another hint to make a lease more attractive is to beat paying the end-of-lease cost for extra mileage. Leases usually allow 10,000 to 12,000 miles per year. But, you could buy miles up front. While you pay 18 to 25 cents per extra mile at the end of a lease, if you buy miles up front you pay no where near that cost.
Leasing may save you money. It’s time to think about the pluses and minuses between buying and leasing.
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