Zero down leasing
Apr 20 '00 (Updated May 26 '00)
We leased an Oldsmobile Alero (1999) half a year ago. This is our first experience with leasing, and I did some research on details about leasing advertisements, and here is what I conclude and how we decided.
First attraction to us is the Alero ad about "Zero down". After checking with the dealer, we realized that it was not absolute zero. You have to pay tax and a little bit process fee, plus the first month leasing payment, it came to $750 for us. Although it's not really "Zero", it's still very good comparing to the average of about $2000 down for leasing any other types of cars.
Second thing we realized is it's actually more cost-effective to lease a mid-class car than an economic-sized car. For example, it's better to lease a Ford Taurus than to lease a Ford Excort. The way I understand it is mid-class car has more re-sale values when it's old, while the economic car, although cheaper at new, also lose its value faster. Looking for the residue value on your leasing agreement, it roughly reflects how much your car still worth after the years of leasing contract expires.
The only exception I found is to lease a Toyota Corolla. It's almost the least expensive car on lease among all types of car (probably reflecting its very good reputation and very good re-sale value too). But even with a very low monthly payment ($170), Corolla still requires about $1800 down comparing to our deal on Alero. Combining the fact that we already own a Corolla, and we didn't have that much money for downpay, we chose the Alero.
The third thing to look for is obviously monthly payment. The lowest monthly payment on any kind of leasing I found is with Corolla, and it's around $170 to $190 depending on how much money you pay as downpay. There are a whole lot of cars leasing at the monthly payment range of $200 to $250. But one thing you have to keep in mind is that these advertised payments almost always have the small underline notes saying "plus tax". That will add a good $20 or more to the advertised price. We ended up with $250 monthly (including tax) for our Alero, which taking into the consideration that my car is 6-engines, 24 valve, 150 hrsp, and automatic everything plus CD stereo, I considered it a very good deal.
The fourth thing is the length of the leasing agreement. A three-year leasing is fairly standard, but sometimes dealers can go longer (four years) with a lower monthly payment. The general rule is they prefer to do longer leasing with better cars. From the consumer side, it's not always good to go longer for the benefit of lower payment. For you will be obligated to something that you may want to change after a couple of years, or something happens that you can not sustain the leasing agreement. That brings to my fifth point.
The fifth important thing to look for when you sign a leasing contract is to ask if the contract has buying options soon. The sooner the better. My contract has buying option after one year. The buying option allows you to get out of the leasing contract sooner if you want, and also gives you the option to buy the car, or exchange the car for a later model.
Other things to look for include: whether the deal has restriction on annual mileage (they normally do); how much money you have to pay when ending the leasing contract (normally equal to your monthly payment); and how you should return the car in case you move out of the city.
Six month into my very first leasing car experience, I am happy with it so far, and enjoy a lot on my Alero while paying a relative low monthly payment. If we didn't go on leasing, we wouldn't be able to afford a car this level, and probably would end up paying a little more monthly while paying about $1000 as down. We will probably take the buy option next year when we are more financially sounded. But who knows, maybe I will exchange it for a newer model of Alero since I love the car so much so far.
Good luck on your hunting for a good leasing deal. Hope my experience helps.
 |
|
|
|
|
|
|
Epinions.com ID:
augustwind
|
|
Reviews written: 87
Trusted by: 45 members
|
|
|
© 1999-2009 Shopping.com, Inc.