Lease a Car for Less -- Savings Experiment

Lease a Car for Less
Lease a Car for Less

Leasing a new car can be more expensive in the long run, but that doesn't mean a good short-term deal can't be found. Here are a few auto-leasing tips that will help you drive away with the best possible bargain.

First, always try to lower your vehicle's capitalized cost or total price. The most common rip-off is when dealers charge the manufacturer's suggested retail price for a car that should be thousands of dollars cheaper. What many shoppers don't realize is that this number can actually be negotiated down in addition to the mileage limit, down payment and purchase-option price.

Next, find out what the "money factor" or finance rate is on the vehicle. This typically isn't disclosed in lease contracts, so you have to ask your dealer. Money factor is always expressed as a very small number. To convert it to an annual APR rate, simply multiply it by 2400.

Once you have your APR, you can determine it's fairness by checking consumer finance sites like BankRate.com. Here, you can compare your APR to national average auto loan rates. Unless you have bad credit, you shouldn't be paying any more than the online average.

Lastly, when choosing a car, try to select one with a high resale value. When your lease ends, your vehicle is going to be worth a lot less, and you'll responsible for paying this depreciation cost. However, you can help avoid any pricey surprises by checking out Edmunds.com, where you can search for any make and model and easily find out how it will depreciate each year.

Leasing a car can be confusing, which is why it's important to do your homework before you sign the dotted line. Follow these tips, and you'll be taking control of the wheel, as well as your budget.

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