| Dealers offer many different financing options these | | | | Why Should I Care About The Miles I Put On A Car? |
| days and one of the most popular is a lease... but | | | | Once you have picked the car, and determined the |
| leases can be confusing because they use terms like | | | | lease term that works for you, the sales agent will |
| money factor, and you get to pick how many miles | | | | probably ask the amount of miles you will be putting on |
| you drive. Lets start at the beginning. | | | | the car. Most leases that you see advertised are for a |
| What Is The Money Factor? | | | | small amount of miles, usually 10,000 or 12,000. This is |
| The Money Factor is the interest rate in a lease. | | | | something that dealerships will try to make sound very |
| Where in a typical loan you might get 6% interest rate, | | | | important, and often convince you to increase the |
| that would equate to a money factor of 0.0025. This | | | | pre-paid miles to 15,000 or more. This is only something |
| number is achieved by dividing the interest rate 6 by | | | | to worry about if you intend to just turn the car in |
| 2400. You can convert the money factor to a | | | | when you are finished with the lease. If you plan on |
| percentage by multiplying it by 2400. So if you are | | | | purchasing the car at the end of the lease, or decide |
| presented with a money factor of 0.00375 you could | | | | to trade it in for another car, you will end up wasting |
| quickly find out that equals 9% interest. Money factors | | | | money, since part of the depreciation of the car is |
| change depending on the term of the lease and the | | | | rated on the miles you "intend" to put on it. Which is |
| type of vehicle, so check around for the going rate. | | | | why if you change from a 12,000 to 15,000 mile lease, |
| Why Does The Payment Change For Different Lease | | | | your monthly payment will go up. Keep in mind what |
| Terms? | | | | you intend to do at the end of your lease. |
| First mistake people make is figuring that the longer the | | | | Most consumers do not just turn in their current lease, |
| lease the lower the payment. This is not always the | | | | they end up buying another car and using their current |
| case. There are many different factors that make up | | | | lease as a trade-in. So you see, paying extra money |
| a lease, one of them being the term. The term of the | | | | for miles on a car is really not worth it for most |
| lease (24 months, 36 month, 48 months) changes the | | | | consumers. By learning just these three things you can |
| depreciation amount of the car. Since a lease price is | | | | walk into a dealership with the understanding and |
| determined, for the most part, by the depreciation, the | | | | knowledge necessary to get the best deal out there. |
| longer you own the car the more it will depreciate. | | | | Once you understand some of the fundamentals of |
| Cars depreciate quickly the first year you own them | | | | leasing a car or truck, you will be well on your way to |
| and also the longer you own them. You will sometimes | | | | getting the best deal for you money. Never be afraid |
| see that you can get a shorter lease term for less | | | | to ask questions and have the sales person draw out |
| money then a long lease term. The typical "sweet | | | | the details of the deal. |
| spot" of the lease is around 30 - 36 months. This is | | | | Using these three tips you can be the dealership at |
| usually where the best rate is found, but always get a | | | | their own game...and above all else be sure to check |
| few quotes for multiple terms so you can see as | | | | out a good auto lease calculator before agreeing to a |
| different cars have different "sweet spots" | | | | dealer's terms. Here is to leasing on your own terms. |