Accepting you always have to make a payment is the key rule for leasing a really nice car for cheap, expert says
LEASING a car has loopholes and strings attached but there’s a simple rule to abide by to get the best deal, experts have said.
Ray and Zach Shefska, the father and son duo that makes CarEdge, gained traction on social media for publishing free car-buying tips based on Ray’s 40 years of experience as a sales manager for several dealerships.
Zach used his entrepreneurship, website-building abilities, and incredible ambition to create CarEdge – a place for people to buy new or used cars, apply for financing, and browse purchasing tips and advice completely free.
The goal was to make car buying transparent, easy, and fast, and the Shefskas have done just that.
In an exclusive interview with The U.S. Sun, Ray and Zach discussed the nuances of leasing a brand-new car, and what buyers should know before signing an agreement.
The trick, Ray says, is that leasing a car is purposefully confusing.
“When it comes to leasing, typically personnel know about as much about a lease as customers do,” he said.
“Which means salespeople know very little, but customers know even less. They have no idea how a lease is structured or what it all means.”
Leasing a car is essentially an extended car rental involving monthly payments to drive the car.
The idea is when the lease is over, typically between 24 to 36 months, the car is available for purchase at a reduced price, or the vehicle can be reduced back to the dealership.
Leasing a car, however, comes with a long list of restrictions like how many miles a car can be driven per year, with pay-per-mile rates that could cost drivers if they exceed the limit.
They also don’t allow for any customizations to the vehicle.
The length of the lease has a factor in monthly payments, too.
The major drawbacks are some of the other rarely discussed limitations, like moving out of state or the differences in handling a car accident in a car you own versus one you’re leasing.
Moving out of state typically requires people to return the vehicle to the original dealership once the agreement expires, and if the vehicle is totaled in an accident, you’re still responsible for the remaining balance of the car.
Breaking a lease and ending the contract early can have serious penalties.
Most people looking to lease a car look at the monthly payment they’ll be responsible for, but Ray says a different figure is more important.
Expert Advice on Leasing a Car
Ray and Zach Shefska, the father-son duo making up CarEdge, spoke to The U.S. Sun Motors Reporter Kristen Brown in an exclusive interview on their top tips before signing a lease agreement on a new car.
Leasing a car can be a more viable option for some instead of financing with an auto loan.
Leasing a car for 24 to 36 months can be attractive to many because monthly payments are typically lower than loan payments, though there are some restrictions, like mileage allowances.
At the end of a lease, people can either buy the vehicle out at a reduced price, or they can return the vehicle to the dealership and lease another car.
Before jumping into a lease, Ray gave his top tips to consider, stemming from his 40 years of experience as a sales manager for several dealerships:
- Learn the interest portion of the lease – or the “money factor” – to understand how much interest you’ll be paying and how much it equates to overall.
- Negotiate the selling price before discussing the monthly payments – the cheaper the selling price of the car, the cheaper the payments.
- Accept the premise that you will always have to make a payment, so you can either have a nice car for a cheaper payment, or a lesser car for a higher payment.
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“What you need to do is negotiate an agreed-upon selling price of the vehicle before asking about the monthly payment,” he said.
“You want to negotiate the cheapest price from the leasing company, because the cheaper the lease costs, the cheaper it’ll be overall.”
Ray said the problem is how people typically perceive a lease, which is a way to get a nicer car for less per month.
“You’re going to accept the premise that you’re always going to have to make a car payment, so you can either have a really nice car for a cheaper payment, or a lesser car for a more expensive payment,” he said.
The best thing to do, he said, is to explore your options and not just settle for the dealership closest to you, as some may have better rates.