Scams Auto Dealers Use In Leases That Can Cost You $1,000's

Over the past 7 years I have helped my friends and family to get the lowest lease payments around. I want to help you with these tips to know before you go to the dealership.

Know about the money factor:

Do you know what a money factor is? The money factor is a confusing number that relates to the amount 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 but 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.

Step 1: Know how to calculate the money factor into an interest rate. This alone will save you $1,000's.

Step 2: Don't pay for a warranty that you will never use, extended warranties can always be picked up at the end of the standard lease, if you decide to keep your car.

Step 3: Have an idea of what you want to do with your car after the lease is over, if you are going to buy or lease another car, don't pay extra for miles.

Don't be a victim at the dealership. Arm yourself with the information the dealerships don't want you to have. The only way to win is to find out their secrets, then beat them at their own game.

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