trail: Lease

To get a nice new Camry, Malibu or Altima at $499 a month is terribly tempting; there's something about the number that no one can resist. There was even a recent review in the New York Times of a Honda Accord that went for a $199 a month (with additional money for the upfront payment, tax and license). It attracted appropriate sighs of longing and disbelief too. So is there anything about the situation to not feel wonderful about? Well, there's nothing at all, if your credit rating fairly sparkles (and if there was a credit card bill you accidentally paid a day late 10 months ago, you could already be out of the running). You wouldn't qualify for a temptingly cheap car lease offer otherwise. This is a great deal of course; but how do you go into that dealership and come out with a car you want, and not a brushoff? The whole car lease idea has been in hibernation for a couple of years now. When gas prices rose to four dollars a gallon, droves of people terminated the leases on SUVs, and right away the car makers found themselves stuck with fleets of used SUVs with no market value. They were so stunned by this whole debacle that they swore off leasing altogether; until now, that is. Obtaining a lease though isn't going to be as easy as it was anymore. You don't just show up with proof of what you made over the last three months and get your car lease. The automakers are putting out car leases again on the market; but they are extremely careful over whom they will give the lease to. It is this kind of careful scrutiny for a guaranteed dependable customer that makes a $199 car lease possible. Another reason this is possible is that people are buying more used cars now than new ones. When used cars are expensive, it makes depreciation on new cars really small; if the depreciation each year is tiny, they only need to take a tiny payment from you to cover it - that's the $199 you pay. And finally, there is the real reason why they let you drive it off for $199. The lease contract estimates that you will drive very little - about 12,000 miles each year for three years. You'll have to pay a higher mileage allowance after that. And of course, don't forget that you don't own this car; at the end of three years, you'd better be willing to drive the car back to the dealership, and just walk off. If you bought the car, you would have an asset. Going up to the dealer to get yourself a new car lease, it might be difficult to actually walk away if the deal doesn't materialize, It is easy to consider paying more for a car with more options, a bigger engine, and a poorer deal. You need to understand that the greatest hand you hold in a car negotiation is that you can resist the sales pitch, and walk away. You're there to do yourself a favor, not one for the dealer. There are plenty of certified pre-owned vehicles on the market; you could get better financing for used cars too, because the manufacturers who keep stocks of used cars are anxious to let them go. And these are better deals than signing a car lease any day.

The Secret of the Cheap Car Lease

To get a nice new Camry, Malibu or Altima at $499 a month is terribly tempting; there's something about the number that no one can resis...