Auto Leasing Scams

Over the past 7 years I have worked with many different companies helping my friends and family get car leases.  In that time I have seen a few scams that dealers run to entice people, who are not paying attention, into leases that are actually worse then buying the car outright.  Here are some tips to look out for the next time you are at a dealer leasing a car.

Know about the money factor:

Do you know what a money factor is?  The money factor is a type of interest that is charged on a lease.  It comes from dividing the interesting rate by 2400, so if you have a money factor of .00375, which sounds low it works out to be 9%, which you would run from if you were buying the car.  If they give you the interest in money factor terms just remember the simple math to get the real percentage.

Paying for extended warranties:

If you are only leasing a car for 3 years, why would you pay for an extra warranty that covers 5 years?  Most finance people will try to push the extended warranty because they make a huge commission on the total you pay for the extended warranty.  Also, check the terms of the warranty in general.  Most car makers these days are offering 3-5 years with the cars as a standard warranty, so don't get fooled.

12,000 Miles vs. 15,000 Miles:

Do you plan on just turning you car in at the end of your lease or will you end up buying another car?  Most people end up buying another car after their lease is over...so why pay extra money per month on miles that truly don't matter.  The only reason you pre-pay for miles is that you intend to just drop the car off at the end of the lease and walk away.  If you intend on buying another car after your lease you can use the current lease with positive equity to purchase the next vehicle, just like you would if you owned the car. 

So you see that if you are prepared when you walk into the dealership you can beat the dealers at their own game.  If you use these tips as well as the others I post here, you can get a car at well below sales price and get a lease payment you are happy with.

You can verify your monthly lease payment with my Auto Lease Calculator.  Just fill in the form and it will quickly calculate the lease payment you should expect at the dealership, giving you even more information to help beat the car dealers.

To knowing before you lease

Chris Richards

Expert Car Buying Tips