When shopping for a new car to lease, many people tend to visit car dealerships without much prior preparation or knowledge about car leasing and what it entails. Most people will probably have a fair idea of the make and model vehicle they are interested in leasing, but knowing this piece of information by itself is far from sufficient when it comes to what you should know when leasing a car. In this article, we will provide specific information regarding what to know when leasing a car so that you are well-prepared and well-informed.
1. You should know that you are absolutely sure that you want to lease a car. Keep in mind that once you lease a car, you have signed a legally binding contract that obligates you to make a payment every month until the end of your lease. Of course, there are ways to end your car lease early, but they aren’t always available or easy to do.
2. You should know what car you want. It is important to know what car you are looking for so that you don’t waste your own time or the dealer’s time. Do your research before going to the dealership and come up with the ideal car that you plan on leasing. This significantly reduces the time that you will spend at the dealership.
3. You should know your credit score and be familiar with your credit history. Your credit score will essentially determine how good of a lease deal you can get. People with tier 1 credit can get the best deals available because they have exceptionally high credit scores. If your credit hasn’t been established, which is common for younger people whose access to credit is more limited, you may not qualify to lease a car and you should seek a co-signer to help you get approved.
4. You should know the invoice price of the car you plan on leasing. The invoice price of a car is the price the dealer pays the manufacturer to buy the car and place it in the showroom or lot. It is important to know the invoice price because it tells you just how much you can reduce the selling price to bring it as close as possible to the invoice price in order to get the lowest monthly payment. The selling price is the negotiated price of the car that the dealer uses to calculate your monthly lease payment. The lower the selling price, the lower your monthly lease payment.
5. You should know how to calculate your car lease payment. If you understand how a car lease payment is calculated, you stand in a better position to negotiate because you have familiarized yourself with with what can or cannot be changed or adjusted with respect to a lease deal provided by the dealer.