GoBankingRates Examines Leasing Practice
Leasing isn’t for everyone – Cars.com reports that according to CNW Market Research, nearly a fifth of drivers, 18.5 percent, choose to lease their vehicles instead of taking out an auto loan. But with no money down required, sign and drive lease deals can seem like simple and cheap way for consumers to get behind the wheel of their dream car.
However, in its latest report, GoBankingRates finds that “sign and drive” deals aren’t usually as convenient or cost-effective as they’re advertised to be.
“The first thing you’ll discover is that, unless you have an impressive credit score, it’s going to be difficult for you to even qualify for this type of deal,” says Stacey Bumpus, expert contributor to GoBankingRates. The site’s investigation of sign and drive deals reveals that advertised offers represent the best prices that are only extended to “well-qualified buyers” – a select few of applicants.
According to the report, not all buyers will qualify for the quoted offer, and many may end up with a higher monthly lease payment than they had planned.
Furthermore, potential leasers are often responsible for taxes, title and registration fees, upon signing. “As with any other circumstance that requires you to spend your money, it’s critical that you read the fine print on a sign and drive lease,” says Ms. Bumpus.
As with any other circumstance that requires you to spend your money, it’s critical that you read the fine print on a sign and drive lease. The first thing you’ll discover is that, unless you have an impressive credit score, it’s going to be difficult for you to even qualify for this type of deal.
Don’t believe it? The next time you find a deal, look for the asterisk then scroll down to the fine print. Most likely, it will read something to the effect of “For well-qualified buyers when financed through XYZ Financial. Not all buyers will qualify.”
This is due to the fact that auto dealers aren’t willing to bet on a person with poor credit making car payments without a security deposit or down payment.
Also, it’s important to note that most sign and drive deals require taxes, as well as title and registration fees — usually at the time of signing. In other words, you’re probably not driving away from a dealership without paying a dime.
Another thing to note is that sign and drive lease deals make up the difference you’re not paying up front in your monthly payment. For instance, a no-money-down contract could result in $280 in monthly payments, but if you were to pay $2,600 at lease signing, your monthly payment could be reduced to $199 per month
For more information read the reported on by Stacey Bumpus for GoBankingRates.com.