CAR LEASING MISTAKES: TOP 15 WAYS YOU COULD END UP LOSING BIG
Leasing a car can be pretty complicated if you’ve never done it before. Who are we kidding — it can be pretty complicated even if you’ve done it before. This is due to the fact that the car leasing industry keeps customers in the dark about a lot of things, ensuring that they get customers who don’t know anything about leasing jargon, loopholes, and regulations and can therefore be easily upsold.
In this article you’ll learn how to avoid making common mistakes that could save you a lot of money (upwards of a couple thousand) and ensure your dealer knows (or thinks) that you’re a leasing expert.
1) Not getting gap insurance
While most people , a lot of people still don’t know what exactly gap insurance is. Well, lucky for you, this next paragraph is dedicated to detailing all about it. It’s basically the coverage for the dollar amount difference between the MSRP of your car when you started you signed you’re lease and how much it’s expected to be worth at the end of your lease have remaining on your lease term. In a perfect world, you wouldn’t even need this insurance (or any insurance, really) but accidents happen and gap insurance is here to help.
Imagine you just went to a dealership and leased a BMW 3 series without getting gap insurance. Stopped at a red light on the way home, you’re pretty excited about your new ride. You have the music bumping, the roof down, and your shades on. You’re the coolest guy on this block right now. It’s at this exact moment that some Chevy smashes into your rear at full force and consequently totals your car to a pummel. You’re fine, but there’s the looming thought in your mind that the insurance company is only going to cover the value of this car, not what you agreed on in your lease term 15 minutes before. You then get picked up by your angry wife who fights with you the whole way home and can’t understand why you didn’t just get the insurance. You have no answers for her. You cry yourself to sleep for the next week.
2) Lowballing your mileage
Do your research! Car values aren’t necessarily related to how cool a car is or the brand name. it could make more sense for you to lease a BMW than a Kia given the right circumstances if the Kia’s value depreciates significantly over the course of your lease term, where as the BMW will retain value. Don’t be afraid to ask your dealer about residual rates and depreciation also, it’ll give you a lot of insight as to whether or not you’re getting a good deal.
5) Having a really long lease term
One of the main reasons people lease over buy is because it allows them to drive a car they really like without having to deal with it as a permanent purchase. A big reason you should avoid leasing long term is because manufacturer’s warranty generally lasts about 2-3 years, meaning if your lease term exceeds that amount of time, then you’ll wind up paying for maintenance on a car that you don’t even own. There’s no benefit here and actually no logic. If you really like the car that much, you’re better off purchasing it.
6) Being in the dark about your credit
7) Not bothering with defining normal wear and tear
Understanding what you’re liable for and what you’re not liable for is a big part of negotiating a good deal. Make sure ahead of time that you know if you spill some coffee on your seat, you might be held responsible for the stain. Otherwise, you’re going to be in for a not so pleasant surprise come your lease end when you owe an obscene amount of money on little things that you would consider normal wear and tear but the leasing company might not.
8) Forgetting about keeping up with maintenance
While you could very well have defined the terms of what extent of damage to your car your warranty covers, making sure that you’re going to adhere to that extent for the years of your lease term is a totally different ball game. Also keep in mind that your dealer might not disclose the amount of money a small coffee stain is worth vs a small dent. Make sure everything you’re unclear on is communicated to you and make sure you follow through on them year after year after year.
9) Put down excessive money upfront
The main reason people put a lot of money down upfront is because it dramatically lowers your monthly payment – and if you’re the type of person who isn’t too keen on saving up money, it’s very possible that you’d rather get your monthly payment as low and possible and put down the money while you still have it. This is all fine and well, but when push comes to shove and your car gets in an accident or stolen, that money is completely gone. You definitely won’t be liable for the total loss or the stolen vehicle if you have the proper insurance, but the money you put down upfront toward your lease is lost money. Just pay as little as possible upfront and deal with the payment month by moth – it ends up being the same amount of money by the time your lease is up and the risk factor is much lower.
10) Letting the dealer push you into leasing a car or signing up for a package you don’t really want
Keep in mind that the dealer is not your local friend who happens to work in a car dealership and actually has your best interest at heart. A car dealer is just doing his job (rightfully so). And part of his job is making sure that he can maximize the dealerships’ profits (and conversely, his own). So before signing anything, really ask yourself: does this guys selling skills have anything to do with me signing up for this more expensive trim? Could I do without it? Is it something I would want had I spoken to someone else about it?
If you answered “no” to any/all of those questions then put the pen down and back away from that sales guy!
11) Breaking your lease contract early
When you break a leasing contract early, there are pretty serious repercussions and it almost never makes sense to do so. Usually you’ll have to pay a cancellation fee upwards of $450, in addition to paying off the left over months of your lease term, and to top it off you’re still responsible for the depreciation costs. Just don’t do it. Trust us.
12) Purchasing your leased car after your lease is up
Buying your car at the end of your lease isn’t always a bad idea if you additionally buy an extended warranty so you don’t have to worry about uninsured maintenance. Conversely, if you car hasn’t been well taken care of then you could just be adopting a long term problem that you’ll have to spend a fortune on repairs.
13) Not shopping around
Signing a lease for a car without comparing it to other lease deals is just about the worst thing you can do when trying to get a good deal. You don’t even know how the competition stacks up, how can you possibly ensure that you’re getting a good deal? You can’t.
14) Being lax on the negotiations
Being able to effectively negotiate is probably one of the most important skills you can have as a prospective car leaser. As far as you’re concerned, everything is up for negotiation. So don’t be afraid to ask questions, be curious, be pushy. If something’s not clear to you, assume it’s because the dealer didn’t communicate it effectively (not because you just don’t understand). Go in there with the mindset that you are capable of understanding everything and anything the dealer understands and you’ll get what you want. If you’re not annoying the hell out of the dealer, you’re not doing it right.
15) Heading into a dealership to begin with
You really only have to take any/all of these things into consideration if you’re actually going to a dealership. Not to mention that you’ll be limited to one brand of car, deal with an annoying dealer, and take obscene amounts of time out of your day in order to lease a car. If any of these things sounds like your cup of tea, then a dealership is your one-stop-shop. If not, Carvoy.com offers a wide selection of brands, a customizable lease contract, vehicle delivery, and complete autonomy to allow you to have the absolute best car leasing experience possible.