Some Car Leasing Questions?

Question

I've decided that with my lifestyle leasing a car is more economical for me however I have never done so and have some questions...

I have a car loan right now that is for more than the value of the cars trade in value, how would the dealership/leasing company handle this exchange. Usually when buying a new car they just tack the difference onto your new loan.. not sure how they would do it in this case?

Do pretty much all dealerships have leasing companies they work with just like loan companies, or would i need to find specific lots? Would it be better for me to find a leasing company to work with before stepping onto a lot? If so, any suggestions?

Is it common to lease used cars? I'm looking for a car that won't depreciate so quickly so I would like one a few years old, like 2005-2006-ish, also so I could afford a bit nicer car older than newer.

If I were to get in an accident, who would cover the difference if insurance didn't cover everything? Me or the leaser?

Answer 1

Leasing used cars is not very common for a number of reasons. Residual values, on which leases are based, are usually very low for used cars. Money factors (interest rates) are higher than for new cars. Unless you lease an almost-new car, you won't have any warranty to protect you from expensive repairs for a car you don't own. And there are no manufacturer incentives or special deals on used cars as there are for many new cars. In fact, it's very possible to get a better new-car lease than a used-car lease for the same car make and model. Here's an article with some more details:

http://www.leaseguide.com/Articles/lease...

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Answer 2

A lot of Qs there for one post...

Dealers work with a couple of lease companies, just like lenders.  Usually there is a primary company that is underwritten by the manufacturer - ie GMAC Lease for GM, Nissan Auto Lease for Nissan, etc.  Plus a secondary company like GE Capital that will write leases.

It will be better to work with the dealer's companies.  Usually there are lease incentives the manufacturer subsidizes, that you cannot get if you use an alternate lessor.  So that $0 down $299/month on a new WHatever will not be available from anyone else.

It is almost always a terrible idea to try and lease a used car.  The residuals are terrible, the money factor is high.  It is very rare to find a used car lease in the first place.  The only time leasing a used car makes sense is if you own a business, and the vehicle is a work truck.  Otherwise, its not a viable option.

You need to get GAP insurance.  The dealer can get it for you, or you can talk to your insurance carrier.  But one way or another, make darn sure you have it before you get the keys.  GAP pays the difference between your regualr insurance settlement, and the balance of the lease.  Several companies offer it, just make sure you have it.

I hope that you have looked at all the ins and outs of leasing.  It can be a good thing for the right person, when done properly.  Never lease past 3 yrs, make sure you stay under the milesage requirements,and take very good care of the car.

Answer 3

The lessor will pick up some of the inequity on your trade. It depends on how much and how good your credit is. You may still have to put money down.

All manufactures offer a variety of leasing programs. Credit unions don't really offer leasing, as far as you getting "pre-approved" before you hit the lot.

Used car leasing is not the better way to go. Most company's don't offer it any more. Think "Risk is Rate". If the car is already three years old then you lease it for another three. The lessor is getting back a six year old car with close to 100,000 miles. The residual value will be low (meaning you pay for more of the cars deprecation) the money factor (interest rate) will be high. So, your payments aren't lower than leasing a new car. Add in the cost (and risk) of repair because your not under warranty anymore and you start to get the picture.

Most lease company's include "GAP" insurance to pay any inequity in the event of a total loss or theft.

When it comes to getting the "best deal". With your level of experience, I would contact a fleet/Internet department and work it out with them over the phone/e-mail before you commit to some thing you don't understand.