Smart Leasing Begins Here! Tips on How to Lease Like a Pro Part 3
This is part 3 of the series on how to lease like a pro. If you want a brand new car without paying too much cash upfront then you should definitely consider leasing instead of buying a car.
However, it is true what they say that leasing is not for everyone. If you take the chance to study the lease agreement and compute the actual monthly payments, you will no doubt end up with an affordable car lease--while driving the car that you truly like!
How the Down Payment or Capitalized Cost Reduction Affects the Price of the Car Lease
First of all, it is best to AVOID zero-down lease offers altogether.
Why? Not because we are trying to rob you of the chance to save money but zero-down lease deals will actually make you spend more over the duration of the lease.
Car dealers will offer no-down or zero-down leases mainly to attract a wider customer base. The adverts do sound enticing--imagine paying nothing at the beginning of the lease term. This is ideal for the cash-strapped buyer!
The Bad News on Zero-Down Lease Deals
We will give it to you straight. The bad news about zero-down car leases is that it will definitely result in higher monthly payments and higher interest rates.
Remember also that you WILL still need to fork over some cash at the beginning of the lease term. You will still have to pay for taxes and licensing fees along with other expenses and fees incurred to facilitate the car lease.
Benefits of Making an Adequate Down Payment
The cap cost reduction or down payment is termed specifically to help reduce the amount of the capitalized cost. The capitalized cost is the selling price of the car and will be amortized over the length of the lease term.
Do you have a low or bad credit rating? Simply offering a higher cap cost reduction will somehow lessen the sting of the higher interest rate--not to mention serve as a gesture of goodwill to the car dealer, bank, or lender.
If you managed to significantly reduce the capitalized cost then are on your way in enjoying low monthly payments on your car lease. This means that you are saving money each and every time that you drive the car.
If you are planning to lease a car then you should begin saving money for the down payment TODAY.
More to come on how to lease like a pro.