Car Leasing Tips

Car Leasing Explained: How To Lease A New Car

* What car leasing means, how it works, advantages and disadvantages of car leases

* We'll review the best free discount new car quoting web sites like InvoiceDealers,, Yahoo!Autos,,, and CarsDirect, to get you new car price quotes

* How to get out of your car lease via an early lease termination without paying any penalties

* Swap a lease strategies: How to use sites like and to transfer your car lease

* Our free car lease calculator Excel spreadsheet download to help you make informed decisions on auto leasing

* Reviews of car lease calculator tools Expert Lease Pro and Lease Wizard

* Who should not lease a car

It does not matter whether you lease or buy the car, it still depreciates the same 50% in 36 months.

What Car Leasing Means

Instead of buying a new car with a bank loan, you rent or lease the car for 3 or more years then give it back to the leasing company at the end, with a residual value of about 50% of when the car was new. Auto leasing is a way to drive more car than you can afford and change cars every 3 years without hassles or trading in. If you understand all the terms as I explain them, and study the sample exercises in this article, you will be poised to negotiate a value added lease. But overlook one detail or forget to check their math, you'll lose your shirt. I'll show you how to be a proactive deal maker and level the car leasing playing field. When you lease a car, the dealer sells the car to the leasing company who leases you their car for 36, 48 or more months. The dealer handles all the financing paperwork in the lease, you usually don't talk to anyone at the leasing company at all. When we talk about the dealer financing your lease, we are referring to their handling of the paperwork on your behalf, you normally are not leasing a car from the dealer, but from the leasing company.

The leasing company can be a bank, the car dealer, or a car manufacturer like Ford Motor Credit. The selling price to the leasing company is often called Capitalized Value, or Gross Cap Cost. You can reduce your monthly lease payments by reducing the cap cost. This is called cap cost reduction, and can be accomplished by haggling a lower selling price, and by putting down cash to reduce the cap cost. Your monthly lease payments when leasing are lower than your car loan payments would be when buying the car, because you are paying off only 50% of the car's value on a lease, and paying off 100% of the value on a car loan. In an auto lease you are only paying for approximately 50% depreciation + interest, but at the end of a 36 month lease you have no equity in the car, you've paid hundreds in useless in dealer acquisition and disposition fees, and now you have to do it all over again on your next lease. Had you bought the car with a 36 month loan, then after 36 months you'll have $15,000 equity in a $30,000 car, but now you have a used car that you need to sell or trade in order to buy another car. A Vehicle depreciates the same 50% over 3 years whether you buy it or lease it.

The fact that your monthly payments are lower with a lease does NOT mean you are getting a better deal than buying!


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