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Testimonials

"I would like to thank you for your professional assistance in purchasing my new vehicle. Your expertise has enabled me to have my new vehicle at $50.00 over dealer's cost. This is fantastic! I have never been able to work out such a deal with a sales representative. This purchase was so painless. I just gave you a list of the options and the vehicle I wanted, and two days later you found me a dealer with a price of $50 over cost. Good Job!"

Thanks,
John D.

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Buy or Lease?

Leasing a vehicle is not for everyone. The typical lease candidate is someone who drives 15,000 miles a year or less, buys a new car every three years or so, and is willing to always have a car payment. If you keep your car for a long period of time, five years or more, you are probably better off buying the car. Leasing a car and then buying it at the end of the lease can be an expensive way to own a car, especially if the vehicle has to be financed at the end of the lease.

Advantages to Leasing

Lower Payment
The lease payment is lower than the finance payment because you are only paying for the portion of the vehicle you are using. For some people, since the payment is lower, it allows them to drive a more expensive car than if they were financing.

No Down Payment
There is no down payment required to get into a lease.

Lower Sales Tax
You pay less sales tax on the vehicle because the sales tax on a lease is based on the monthly payment rather than the purchase price.

New Car
You are always driving a new car. You are also under the new car warranty most of the lease, if not all of it. This especially cuts down on costly repair bills.

Disadvantages to Leasing

No Equity
You don't own anything. You are simply renting the vehicle for a specified period of time.

Difficult to Terminate Early
It is hard to get out of a lease early. Most leases have an early termination penalty. On top of which you are almost always in negative equity. To buy the car in the middle of the lease is always more than the car is worth. To give the car back early, you are obligated to make the balance of payments less the unpaid interest. Few people want to give the car back plus write a check for thousands of dollars.

Constant Car Payment
You are always making a car payment.

Mileage Limitation
Leases have a mileage limitation. If you go over the mileage they will charge for every mile over, usually from ten cents a mile to as high as twenty-five cents per mile.

Wear and Tear
Leases have a wear and tear clause in them. They can charge you to put the car into saleable condition. It is important to read this clause and see what is required of you at lease end. (Example: If you replace two tires on the vehicle, the leasing company can charge you if they don't match the existing tires on the vehicle).

Auto Insurance
Leasing companies require higher liability limits than conventional financing

LEASING TERMS

Acquisition Fee (Acq. Fee)
A fee used to cover administrative costs of the leasing company. This fee is non-negotiable.

Adjusted Capitalized Cost
The amount of money the leasing company will be paying to the dealer. Usually the purchase price plus any fees minus any cap cost reduction.

Cap Cost Reduction
A down payment, trade-in allowance, or rebate used to lower the lease payment.

Capitalized Cost (Cap Cost)
The purchase price of the vehicle.

Disposition Fee
This fee is used to cover the expenses the leasing company uses to dispose of the vehicle at the end of the lease. Not all lease companies charge this fee.

Gap Protection
Gap protection is included in most leases. It covers the leasing company against any negative equity over the amount your insurance pays in the event the car is totaled in an accident or stolen.

Lease Charges
The cost of money in the lease agreement is usually figured as a money factor or interest rate.

Lessee
The person who leases the vehicle

Lessor
The leasing company. They purchase the vehicle and lease it back to you. They are the titleholder of the car.

Money Factor/Interest Rate
A small fraction usually expressed in decimal points used to calculate the lease charges. When multiplied by the number 2400, the money factor very closely indicates the equivalent annual percentage rate of interest being charged in the lease. (Example: A money factor of .00310 when multiplied by 2400 shows us an interest rate of approximately 7.44%.)

Residual Value
The value of the vehicle at the end of the lease, also known as the lease end value, is usually calculated as a percentage of the sticker price.

Security Deposit
A refundable amount of money held to lease end against any damage that may be done to the vehicle. Usually equal to the monthly payment rounded up to the nearest $25.00. (Caution: Many leasing companies are now waiving the security deposit by raising the interest rate of the lease by approximately ½%. This means you are paying a higher percent on all the money and a slightly higher payment.)

Up Front Expenses
Money you have to pay at lease signing. Usually the first months payment, security deposit, motor vehicle fees, and in some states sales tax.

What is best for you? Choose the right vehicle for your needs, not necessarily the one with the lowest lease payment. Get the best price to purchase it and then decide how to pay for it.

Leasing is a complicated situation. It is easier for the consumer to be taken advantage of when leasing. If you would like to make an informed decision based on unbiased information please give us a call at 800-836-4333.