DOWNLOAD PDF HOW TO BUY OR LEASE A NEW OR USED CAR

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1 Chapter 1 : The Big Debate #2: Leasing, Buying New, or Buying Used? - The Simple Dollar Conversely, if the lease car holds its value especially well, you can buy the car at a bargain price at the end of the lease and either keep or resell it. In some cases, people can leverage equity. Lease return vehicles might just be your best option. Most lease return vehicles have undergone consistent preventative maintenance, as the company that leased the vehicle invests in the maintenance of their products. Purchasing a lease return vehicle can be a great way to buy a car with high value while paying a significantly lower amount than one would pay when purchasing a brand new car. Part 1 of 2: Find a lease return vehicle Step 1: Decide where to buy. When buying a lease return vehicle, it is important to research your options when choosing where to buy from. Most automotive dealerships offer leasing services to their customers, and handle all of their lease returns in-house. For this reason, they are likely to have a regular selection of lease return vehicles available for purchase. This is a great option for those who need help financing, as a large dealership will most likely be flexible on pricing and financing methods. Call your preferred dealerships to set up an appointment and view all your options. Companies that rent vehicles to customers on a daily and weekly basis usually offer their vehicles for purchase to the public once the cars in question are a few years old. Contact your local vehicle rental companies or check your local newspapers for rental listings. Go through advertisements online and find the prices of lease return vehicles. Even if the advertisements are not what you are looking for, you can get an idea of the approximate retail values of lease return vehicles. This research will help you find the best deal in your area and better bargain with your salesperson. If you need financing, it is worth researching all possible sources before you buy. While the company that is selling the car might have financing options, it is worth checking to see if another bank or institution can draft a loan agreement with a lower interest rate. Part 2 of 2: Test drive the lease return vehicle Step 1: Visit and test drive. After you find some cars that you are interested in, book appointments and take a look at the vehicles in person. Be sure to look at all the other lease return vehicles available at each vendor, and make it a point to test drive every car you are interested in. When you are ready to purchase, go through every sales document and contract in full. Ask for a Carfax report and a pre-purchase car inspection from a qualified mechanic before signing any documents. Lease return vehicles are worth considering if you are looking for well maintained vehicles with low mileage and high value. Buying a lease return vehicle can save you a lot of effort and help you avoid the frustration that comes with having to purchase a used car. Ensure that you do some research and test drive some lease return vehicles before selecting one that is best for your driving needs. Page 1

2 Chapter 2 : Compare Leasing & Buying a New or Used Car blog.quintoapp.com If you've decided to lease a car, check with dealers, who often offer manufacturer lease programs, and remember that virtually every aspect of the lease is negotiable. Buy or Lease the Car of Your Dreams. Whether you are buying or leasing a new car, negotiate with several dealers simultaneously. Send this info to a friend To: Check this box if you wish to have a copy mailed to you. See our privacy policy. A A Can you lease a used car? Learn about the risks before signing the lease Last updated: All the benefits of leasing, such as comparatively low payments and a hassle-free return at the end of the contract, apply to a used-car lease as they do to a new-car lease. The financial risk with a used-car lease, though, can be substantially greater. Foremost is the chance of service problems. Bear in mind that any repairs you must make that are not covered by a warranty come out of your pocket, even though you do not own the car. For that reason, it may be a good idea to purchase a comprehensive, bumper-to-bumper warranty for the full lease term. There is a great deal of variation in the five-year-old market. But that knowledge is necessary because your monthly payments hinge on its supposed retained value. If the dealer sets it too low, your payments will be higher than they need to be. The best vehicles to lease, therefore, are those that hold their value very well. Those tend to be luxury cars, sports cars, and some SUVs. As a result, used-car leasing has become largely the province of luxury makes such as Audi, Lexus, and Mercedes-Benz. When a private party wants to get out of a lease early, he or she might look for someone willing to take over the lease payments. You can find lists of offerings on the Internet, where sites found at www. The original lessee will sometimes offer a cash rebate, which effectively lowers the monthly payment on the vehicle. Tips for used-car leasing If you are working with a dealer, bargain the price down as if you were buying the car. Check that any warranty is comprehensive and lasts the duration of the lease. Make sure you can live with the mileage limits spelled out in the lease contract. Over-limit miles can cost you as much as 25 cents each. Before signing the lease, have the vehicle inspected by a qualified mechanic, who can put it on a lift for a full diagnostic check. Used car buying guide Learn more about choosing a used car, avoiding a lemon, buying and selling a used car, pricing and financing, and more in our used car buying guide. Page 2

3 Chapter 3 : Leasing vs. Buying a New Car - Consumer Reports Car buyers have two financing options when it comes time to purchase a new car. Consumer Reports examines the basic differences: lease vs buy. It may also include your credit score. Make sure to ask the dealer about: Your dealer may offer manufacturer incentives, such as reduced finance rates or cash back on certain makes or models. Make sure you ask your dealer if the model you are interested in has any special financing offers. Generally, these discounted rates are not negotiable and may be limited by your credit history. Rebates, discounts or special prices. Ask if you qualify for any available rebates, discounts or offers, as they can reduce your price and, therefore, the amount you finance or that is part of your lease. Dealers who promote rebates, discounts or special prices must clearly explain what is required to qualify for these incentives. Look closely to see if there are restrictions on these special offers. For example, these offers may involve being a recent college graduate or a member of the military, or they may apply only to specific cars. When no special financing offers are available, you usually can negotiate the APR and the terms for payment with the dealership, just as you would negotiate the price of the car. The APR that you negotiate with the dealer usually includes an amount that compensates the dealer for handling the financing. The APR will vary depending on your credit rating. Negotiation can take place before or after the dealership accepts and processes your credit application. Try to negotiate the lowest APR with the dealer, just as you would negotiate the best price for the car. Ask questions about the terms of the contract before you sign. For example, are the terms final and fully approved before you sign the contract and leave the dealership with the car? If the dealer says they are still working on the approval, the deal is not yet final. Consider waiting to sign the contract and keeping your current car until the financing has been fully approved. Or check other financing sources before you sign the financing and before you leave your car at the dealership. Also, if you are a military service member, find out if the credit contract lets you move your car out of the country. Some credit contracts may not. When you lease a car, you have the right to use it for an agreed number of months and miles. How is leasing different than buying? The monthly payments on a lease usually are lower than monthly finance payments if you bought the same car. You are paying to drive the car, not buy it. But at the end of a lease, you must return the car unless the lease agreement lets you buy it. To figure out if leasing fits your situation: Consider the beginning, middle and end of lease costs Consider how long you may want to keep the car Compare different lease offers and terms, including mileage limits Think about how much you drive. The mileage limit in most standard leases is typically 15, or fewer per year. You can negotiate a higher mileage limit, but that normally increases the monthly payment, because the car depreciates more during the life of the lease. If you go beyond the mileage limit in the lease agreement, you probably will have to pay an additional charge when you return the car. Consider all of the lease terms. When you lease, you are responsible for excess wear and damage and any missing equipment. If you end the lease early, you often have to pay an early termination charge that could be substantial. Might you move during the lease period? Some leases may not let you move the car out of state or out of the country. Find out the rules for the deal you are considering. Are you a service member who leased a car? Federal law lets you terminate the lease with no early termination charges IF: Other fees may still apply, including those for excess wear, use, and mileage. Do not agree to get the papers later because the documents may get misplaced or lost. If you financed the car, understand: Make your payments on time. Late or missed payments can have serious consequences: Some dealers may place tracking devices on a car, which might help them locate the car to repossess it if you miss payments or pay late. Find out if the dealer expects to place the device on your car as part of the sale, what it will be used for, and what to do if the device sets off an alarm. Were you called back to the dealership because the financing was not final or did not go through? Consider whether you want to proceed. You do not have to continue with the financing. If you do unwind the deal, be sure the application and contract documents have been cancelled. If you agree to a new deal, be sure you have a copy of all the documents. If you will be late with a payment, contact your creditor right away. Many creditors work with people they believe will be able to pay soon, even if slightly late. You can ask for a delay in your payment or a revised schedule of payments. Page 3

4 Sometimes, the creditor might agree to change your original contract. If they do, get it in writing to avoid questions later. If you are late with your car payments or, in some states, if you do not have the required auto insurance, your car could be repossessed. The creditor may repossess the car or may sell the car and apply the proceeds from the sale to the outstanding balance on your credit agreement. If the car is sold for less than what you owe, you may be responsible for the difference. In some states, the law allows the creditor to repossess your car without going to court. Page 4

5 Chapter 4 : How to Lease a Car and Get the Best Deal - Personal Finance - blog.quintoapp.com Like with car buying, you'll want to keep the discussion of your previous lease return, any trade-in, and the price of the new car separate. Be sure to visit our lease deals page to see the best incentives that automakers are offering on leases. Auto Loans, Loans NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. As any TV watcher can tell you, auto companies are really pushing leasing these days. But a nagging question forms in your mind: Is leasing right for me? Our decision quiz will help you match your lifestyle and preferences to the right car financing choice. How far do you drive? The standard lease contract allows for 12, miles a year or 36, miles for a typical three-year lease. If you drive farther than your allowed miles, you will have to pay 20 cents for each additional mile at the end of the lease. That could be quite a shock! Buying extra miles upfront is an option, but in most cases, high-mileage drivers are better off purchasing a car than leasing it. Do you use your car for business? Are you a real estate agent or a CEO or just someone who wants to impress clients by taking them to lunch in a luxury automobile? You probably can write off your lease payments as a tax deduction. But check with your accountant before you head to the dealership. How clean do you keep your car? Most lease contracts are for three years, which gives drivers plenty of time to spill soda on the seats, ding the bumpers and scuff the door panels. This could prove costly for some people. Do you like to customize? Some drivers like to customize autos with hot rims, running boards or spoilers. Are you short on cash but strong on credit? A commonly cited advantage of leasing is that it maximizes cash flow. So, rather than dumping most of your savings into a large down payment â and making high monthly payments â you can lease instead. One advantage of leasing is that it maximizes cash flow. Do you love driving the newest model? Most of us have limited amounts of money, so we spend our hard-earned cash on things we value. That means we have to make choices. For some people, spending money to always drive newer cars is important. Maybe they like the prestige they think it brings, or they like having the latest design and cutting-edge technology. Such people will prefer leasing. Are you comfortable always having a car payment? Leasing is inexpensive in the short term low down payment, low monthly payment, but over the years, the costs add up. Leasing is inexpensive in the short term, with low down payments and monthly payments. Compare that to the person who buys a vehicle. This can be especially important if the economy tanks or you face financial hardship. Updated March 14, Page 5

6 Chapter 5 : Is Leasing a Used Car a Good Idea? But when you purchase a used car, you'll likely get a higher interest rate than when you buy a new car. So, let's say the annual percentage rate, or APR on a five-year loan for the new car is three point five percent. When the term expires, you return the car. Leasing a car has some drawbacks, however. You essentially rent, not buy, the car. You may have to pay penalties if: Does a lease make sense for you? Leasing is more beneficial than buying when you: Exceeding the mileage limits on your lease can cost you 10 to 15 cents per mile. How to Lease Leasing a car is less complicated than buying one. But to get the best deal on the car you want, you must still follow these steps: Choose a typeâ What kind of car do you want? Better yet, what car do you need? Pick your modelsâ Make a list of car types in your price range. You can reduce non-lease costs by including models with favorable gas mileage, high dependability, top safety features and low insurance premiums ask your auto insurance agent for a list of vehicles that fit the bill. Pay particular attention to comfort, visibility, braking, steering, internal noise and shock-absorption. Ask about safetyâ During your test drive, ask the salesperson whether the vehicle comes with anti-lock brake systems ABS, electronic stability control ESC and head-protecting side air bags. All are valuable safety features. Compare lease dealsâ When you return home from the dealer, calculate the lease deals on offer and figure out how much you can afford to pay monthly. Most people who lease are unaware that their monthly payments will be based on the final agreed-upon price. Negotiate upâ Negotiate the final price of the vehicle up from the rock-bottom cost to the dealership. Your monthly payments will be based on the price you and the salesperson settle on. Paying the Leaseâ The larger your initial down payment, the lower your monthly tab will be. Turning in your leased car early, before the loan term ends will typically result in a penaltyâ unless you are trading in the car for another leased or purchased car. Page 6

7 Chapter 6 : Buying a Previously Leased Car blog.quintoapp.com As an example, let's look at the cost between buying or leasing a $20, car for five years, assuming the same 6% rate on a new car loan (paid off in 3 years) and the lease (two 3-year leases. Leased Cars for Sale vs. Understand the respective pros and cons of used leased cars for sale and off lease cars for sale. If you are looking for cheap cars, then you may be interested in previously leased cars for sale. These cars have often been with the company for many years, and may be the equivalent of a second or third hand car. You may be able to afford this type of car, as they can be very cheap and you may get a great deal. Companies sometimes advertise their leased cars for sale in the backs of local newspapers or magazines, or you may be in contact with someone who knows that a deal is available. Looking to buy leased cars from a car leasing company is one way to save a lot of money on your purchase of a vehicle. Looking for a used car? Look at the car leasing companies, inquire whether they have any leased cars for sale and then inspect the cars which are on offer. Some of the cheapest leased cars are those which have been used a lot, and you can cut a deal on vehicles like this. Make sure that the car is properly inspected by a garage before you make any commitment to buy from a company. Attend an Auction Another way of finding leased cars which can be bought is through bankruptcy auctions. Leased car companies are sometimes rather unstable industries, and there can be a connection between a business that deals in leased cars and bankruptcy. It is not uncommon for banks to sell off the assets of small businesses which have gone under, and a leased cars auction can be the best way to find a great car for a reduced price. Complete the Deal When you have found the leased car that you want to purchase you should also take out some of your savings to put into insurance for the car. You may find that some companies are unwilling to offer insurance on leased cars that have now been purchased, so you might need to shop around for a while before you find the perfect deal. Persistence is the key here, as there will probably be an opportunity for insurance with some company, even if you have to look online to find one. Finding Leased Cars for Sale Whether you go local or rely upon a national agency to sell you a car which was previously leased, you should always check out the quality and age of car they are offering, and maybe have it taken to a garage before you make the purchase. Cheap former lease cars will be ones which have been used by the company for a long time, so there will probably be some wear and tear which may need to be repaired before you buy it and have to pay for the work. Off Lease Cars for Sale: These cars are those that have been leased by someone, but they wanted to opt out of their lease before the term was due. Because of this the dealership has a car for sale at a discounted rate. However, there are some things to think about before buying lease cars for sale. This means that the car is used. However, there are still good deals to be had if you know what to look for. Take Over a Lease or Buy Outright? When there is a lease option still available on the car, you have the option of taking out a short-term lease on the car. You simply take over the payments left on the car. This can be anywhere from 6 to 18 months, but most usually in the 12 month range. You can buy the car outright for the depreciated value, but looking into the short-term lease will help you decide whether or not if you are going to like the car after you drive it for the length of the lease. Look at the Kelley Blue Book website or go to Edmunds. These places will help you determine if the asking price for the car is worth purchasing. These reasons can vary. However, there are a few main reasons that cars are returned. Not being able to continue with payments, or constant mechanical problems. Check the maintenance and the work done on the car over the duration of the lease. With any possession, the value of car will depreciate the longer the car stays in your ownership. Cars depreciate faster than property, as they are used daily, and driving will make the car lose value. Cars depreciate at a different rate, depending on its original value and how well it has been taken care of. If you live at the ocean and the car is damaged and driven hundreds of miles daily, it will depreciate faster than a car that has been kept under cover and driven only on weekends. You may find the car of your dreams, but will be unsure to return the leased car you have been driving for the past few months. When you sign a lease contract, you will be held liable for charges if you return a leased car before the expiry of the contract. You may even be asked to pay for damage the car sustains during the lease, but they may have to pay for it. Lease terms are stipulated in the contract, so it is best to read the fine print, as each lease Page 7

8 agreement is different in certain points. Returning a leased car early could be costly and it is best to speak to the dealer. Car maintenance history may be provided to you by the owner through the records that they have been keeping for the car. This is a comprehensive report that lets you know inspection results, accidents it may have been involved in, odometer reading, previous use e. To order this report you will simply need to have the VIN, which is the vehicle identification number, and pay a fee for the report. Need a Car Loan? Page 8

9 Chapter 7 : Lease or Buy a Car? Answer 7 Questions to Find Out - NerdWallet Updated: December Many factors (financial and otherwise) go into a decision about whether to lease or buy a car. For instance, your choice could depend on how long you typically like to keep your cars or whether you want a brand-new or a used vehicle. Auto Loans, Loans NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Buying a new car is a little like a game show. Choose the right door and you win your prize â a sweet deal on a good car. Navigating the car-buying process has never been easier, thanks to the transparency created by the internet. Decide how much you can spend, what your monthly payment should be, and how you will finance your new car. Choose the right car. Narrow the field and choose the model that best serves your needs. Check reliability and ownership costs. Choose a reliable car that is inexpensive to own, even if it costs a bit more to buy. Test-drive your top choices to see which car is right for you. Cast a wide net by searching dealership inventories online. Find the right price. Use pricing guides to see what other people are paying for the car you like. Contact several dealerships and ask for the best price. Review the contract and sign documents. Set your budget Start by deciding if you want to pay cash, take out a loan, or lease your new car. And remember that you will also have to pay sales tax, registration and insurance. Use the Nerdwallet auto loan calculator to figure out the right monthly payment and down payment. Choose the right car Now the fun begins â picking the right car for you. Think about how you plan to use this car. If safety is a top priority, check out the Insurance Institute for Highway Safety for crash tests. Narrow the field by making a list of must-have features. Filter your search according to your budget and desired features. As you move forward, list three target models to research in more detail. Consumer Reports and J. Power collect maintenance reports from owners and rate all cars for reliability. A closely related issue is the total cost of ownership. Some cars are cheap to buy, but will cost a lot in the long run because of insurance, maintenance, repairs and depreciation. That way, the right model will be pulled out and ready to go. Select a test-drive route that has a bit of everything: Locate your car Maybe one of the cars you tested meets your needs and is the right color. If not, you will have to search local dealerships until you find the right car. Many new cars are listed on sites such as Autotrader. Manufacturer websites might also allow you to search a broader area rather than individual dealerships. Keep widening your search area until you find exactly the car you want. Make sure to see what, if any, incentives and rebates are available for the car you want. Most manufacturer websites list current offers, which usually change each month. You can ask for a price quote by ing the dealership through its website. Or, to save time, use a third-party site such as Truecar. Chances are, the seller is asking more than the market average. If you negotiate in person, here are a few tips to use on the car lot: Negotiate slowly and repeat the numbers you hear. Ask about fees before saying yes to a deal. Ask for a breakdown of additional fees before you agree to any deal. Be ready to walk. No goodbyes are necessary. Maximize trade-in value A lot of people like to trade in their old car so they can resolve all their car-buying hassles at the same time. But this could be a costly choice. While trading in a vehicle is convenient, dealers usually may try to low-ball customers and only pay the wholesale price. To see how much that is, go online to a pricing guide, look up your car and compare the trade-in price what you would receive to dealer-retail what the dealer will try to sell it for. At the very least, look up the trade-in price of your car and negotiate the highest possible price for it. But most people go to the dealership to sign papers in person. Just make sure all the other terms of the loan are the same. Before the contract is drawn up, the finance manager may also try to sell you additional products and services. Buying an extended car warranty at the right price can provide peace of mind. But check first to see how much warranty is included with the price of your new car. The powertrain warranty covers all the parts that make the car driveable, such as the engine, transmission and suspension. The contract will include the agreed-on sales price and these additional figures: This is a percentage of the cost of the car. As crazy as it sounds, the dealership actually charges you for filling out the contract. A dealer has the ability to register the car for you, which is convenient. Philip Reed is a staff Page 9

10 writer at NerdWallet, a personal finance website. This post was updated July 14, It was originally published Oct. Page 10

11 Chapter 8 : CARFAX Fahrzeughistorie fã¼r amerikanische Autos At the end of your lease term you'll either need to buy the car outright (you can finance it like a used car purchase) or trade it to start a new lease. Most leases are capped at 10, to 20, miles annuallyâ and you'll be charged if you go over. Automobile This week, The Simple Dollar is taking a deeper look at five common personal finance debates. Going to the car dealership always feels like a game of roulette. A big part of the whole process is deciding up front what you want, and the first decision is a big one: What Are The Options? The choices here are pretty straightforward: Buying new and buying used both mean that you plan to actually own the car and involves a title transfer and so on. Leasing a new car effectively means renting the car for a long period â the dealer owns the car â but the payments for leasing are far, far lower than the purchase price. What Are The Big Differences? A new car is often under warranty for several years and you can sometimes end up driving one for as long as a decade. Unfortunately, much of the time, the price is prohibitive â new cars tend to be the most expensive option. After your lease runs out, you have no wheels. However, a late model used car usually gives you several years of driving before it needs to be replaced. This is often considered to be the best value for your dollar by many personal finance and car experts. Some cars depreciate even faster, depending on demand, incentives offered and other factors. Why not let someone else take that hit? The big question you need to ask yourself is does the car provide any extra value to me beyond transporting me from point A to point B? The answer to that question depends heavily on what you choose to do for a career and how much time you spend in the car. If you want to minimize the miles on the leased car, consider keeping an old reliable used car around for personal use. Quite often but not always, late model used cars offer the best value, but always compare the late model price to the new price. If you can find an opportunity where a new car is only a thousand dollars or so more than a late model used, go for the new â such bargains are rare, but they do happen. The key to buying a car is to take your time, do the research, and make the right buy for you. Page 11

12 Chapter 9 : How to Purchase a Lease Return Car YourMechanic Advice But even tossing out interest rates, the reliability and quality of new cars can make leasing appealing. It often comes down to the residual value, or the worth of a car at the end of the lease. Many consumers assume leasing is only for new cars, what they overlook is that leasing is simply an alternative method of financing. Leasing works exactly the same with a used car as it does with a new car - the main difference is that your monthly lease payment will likely be a lot less. The biggest part of a lease payment is attributed to depreciation cost. Since cars depreciate heavily during the first 2 to 3 years, it makes sense to take advantage of the situation by leasing a used car and taking a smaller hit on the depreciation. The only problem - many banks and financing companies stopped providing used car leasing in the wake of the financial crisis back in Since then, only a few players have tip-toed back in - so you may have a hard time finding a company that will provide leasing on a used car. Your best bet may be to look into leasing a certified pre-owned car through a dealership. They can try to arrange the lease through one of their finance partners or through a credit union. Another alternative is to try an independent leasing company such as LeaseCompare. Compare Used vs New Lease The first thing you should always do is compare the cost of leasing a used car with the cost of leasing the current year model. Generally, you should be looking at 2 to 3 year old vehicles, ideally ones that are still under warranty or are certified used cars that come with extended warranties. Get a Vehicle Inspection Make sure you get the car fully inspected by a qualified mechanic or inspection service before leasing. If the car has problems, make sure the current owner fixes them before you agree to lease. One good alternative to leasing a used car is to do a lease takeover. Companies such as SwapALease. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals. Got a Question About This Article? Related Car Leasing Articles. Page 12