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Nowadays, you will find many leasing and financial companies in the Phoenix area that offer car leasing. These include the various car dealerships in Phoenix, AZ. However, you need to go for a deal that gives you optimum benefits. A lot of people become victims of poor car leasing deals that burden them even more. Therefore, if you are looking for a used car to lease in Phoenix, you need to put in some effort in research before choosing a car leasing deal.
Here are some of the best car leasing tips that can save you from a lot of hassle.
Know What Car Leasing is All About
Leasing a car is essentially similar to renting a car. The main factor in any car lease is the vehicle’s depreciation value based on how long you will be leasing the car. In a lease, the maintenance of the car is the responsibility of the buyer. The usual depreciation of a brand new car is 50% to 60% of its original value in first three years.
Know Your Options for Car Leasing
Contrary to what most people believe, car dealers do not finance the leasing of the car. Car leasing is offered by a bank, a credit union or the manufacturer’s own leasing company. This means the car dealer is nothing but a middle man in the lease. Some dealers make commissions on car leasing deals and may not guide you about hidden fees and other charges of leasing deals. But, this does not mean that it is not ideal to lease a car from a dealership. Good dealers will offer you more benefits.
An alternative to car dealership leasing is the leasing through independent car leasing companies. This option does not give you the power to negotiate. This means that the prices are fixed with no hidden fees and charges. Each vehicle and model has its own predefined lease value. Usually, the interest rates would depend on your credit score.
Know How Monthly Payments Are Calculated in Car Leasing:
The vehicle’s residual and depreciation values dictate the amount of money you will be paying each month. Some dealers would present very small monthly payments. But there may be some catch in this scenario. The lease period may be very long or you might have you buy extended warranties. Make sure you read all terms before signing the contract.
Know the Interest Rates, Taxes and Other Fees
The monthly payment amount will depend on the interest rates, taxes and fees. All dealers are obliged to disclose the interest rate. The interest rate would depend on your credit score. Good credit scores should give you low interest rates. Other fees included in a lease agreement are leasing fees, taxes, insurance, etc. Make sure you know about each of them before signing the contract.
Know The Down Payment Requirements:
Some leasing companies want you to pay a certain amount upfront. This payment is called the down payment. The down payment is subtracted from the capitalized cost of the vehicle. Some dealers say that they have very low down payment requirements, but they will make money by giving you a very long lease period. So, make sure you understand the terms associated with the down payment.