You may have heard of this elsewhere, but the truth about common car lease myths will certainly set you free. Car leasing is already in a bad light, and it's no wonder at all; confusion drive prospects mad at times, and certain dealers were slipping bad deals across the table to confused buyers who want nothing more but to get hold of those low monthly payment schemes.
These days, especially with the chorus of rising interest rates seen everywhere, carmakers are thinking of shifting their attractive incentives program from low interest financing and rebates to leasing. If you already know what you are looking for and you have the ability to negotiate smart, then these popular car leasing myths should not bother you at all.
Buying a Car is Supposedly Cheaper than Leasing One
If you plan on keeping the car after the loan is already paid off, you get to save your money by buying it instead. But is that really the case? If you trade the car even before you have paid off your loan, then you can bet that the trade-in value will likely not cover your loan's remaining balance.
In case you wanted another car in three years time, you will hear your instincts telling you to sell what you have right now and then match that residual value specified in the lease rather than have it traded. Then you will contemplate paying off your loan. This means buying will surely leave you a thousand dollars poorer, which should not be the case.
Negotiating a Good Buy Is Nearly Impossible
Negotiating leases however is always possible, you'll just have to contemplate on some important things first, like the capitalized cost. This is actually the vehicle price, which you must bang shoulders with on the negotiating table, just like you would when actually buying a car.
The money factor is another play on your sleeves. The lower the figures involved the better. Know that dealers in general are reluctant in revealing the money factor in negotiations, which again suggests that you should be persistent in dealing.
One of the most important things people look into is the residual value, which is actually the value of the vehicle right after the end of the lease. Inflated residual values may lower your monthly payments, but can also tie you down as well. Realistic residual values instead will make it easier for you to sell out the lease, or maybe trade your car during mid lease and even buy after the expiry of the lease.
Businesses Alone Can Get Tax Breaks
Existing tax laws are designed to allow various businesses to deduct and consider monthly payments plainly as an expense. Individuals also get a tax break too. Almost all the states allow individuals to take care of the sales tax only (which will be included on the monthly payments), and not on the vehicle's selling price.
That's it, although there are more. But if you know how to weave your way around these popular car lease myths, then you should be just fine.