Car leasing is seen by many as a good alternative to buying your own car,
because if gives you the chance to have a new car without paying all that money for it. However, one should be very careful at the leasing conditions, when such a decision is taken, because there can be tricky clauses in your agreement.
Auto Leasing Most Comon Scams
Unreal low interest rates:
Some dealers quote a lower interest rate when in reality it’s much higher, in order to make you fall in their trap and get a car leased from them. They do this by skipping to include some fees when they calculate the interest rate. Then, they would charge you those fees from upfront, and you’ll discover that you paid more. If we only look at the money factor, which is usually a four decimal digit, like 0.003. Some dealers quote this as a 3% interest rate, but the real one is this multiplied by 24, which leads us to a much bigger figure. When you want to go for a leasing agreement, don’t be ashamed to ask the dealer how they calculated the interest rate, and ask also about all fees that might not be mentioned from the start.
Leasing Termination Penalties
Ask specifically what would happen, and how much would you have to pay in case you terminate your leasing contract earlier.
Beware that termination fee is not the same thing with early termination administrative penalty. Read all clauses in the agreement very carefully, to make sure you understand all situations and you know how much you’d have to pay in any of them.
Unneeded extended warranty
This is something you surely don’t need, because the warranty automatically comes with the leasing agreement itself. Why pay twice for that? Some dealers may want to drag you into this, by creating you the impression that you need it.
No security deposit
There’s no such thing as no security deposit. This should raise an alarm in your head, and you’ll probably discover that there;s something not OK with that dealer. Stay away from such tempting offers, if you don’t want to regret your car leasing agreement later.
