Leasing is popular option for region’s drivers
When first approaching the process, Rydell GM Auto Center General Manager Jim Lynch says it’s best to first discuss the needs of the customer.
“That’s an integral part of our sales process — to discuss the needs analysis,” he says. “How many miles are typically driven? Do you expect any changes in the next couple years? How have you used your vehicles in the past? What is your preferred trade cycle?”
Knowing personal mileage per year, type of use (business or personal) and future changes to lifestyle will also affect the decision-making process.
Option for ease
Of course, consideration for monthly payment is a large factor for the type of car and contract investment. Tony Meyer, sales manager at Lithia Toyota of Grand Forks, says it’s often the most important factor a customer considers.And it is this factor that pulls many people into the lease deals.
“A lot of people will say, ‘I want this certain payment. I’m just getting out of college,’ and this is where getting a lease is a great plan,” he says. “Because you may be in a different situation later on, toward the end of your contract with that vehicle, and you can later easily move into something that would fit your updated needs.”
Lynch agrees leasing is a great way to get into the right vehicle for the right price and recommends finding an option with a shorter contract term for someone looking to try new vehicles frequently.
“If leasing is done properly — though there are a lot of ways you can set up a lease — it should be set up short term,” he says. “You’re limiting your trade cycle, and therefore eliminating any additional expense you usually have as your car ages, things wear out and you’re out of factory warranty. So you’re really driving a car through the best part of its life.”
Lynch says leasing has the added benefit of keeping the driver informed of usage and “it’s the best way to control your driving expense.” He says it’ssimple to adjust the contracts based on the individual need. “We can tailormake a lease based on whatever the needs of the person are. Most people don’t realize how flexible a lease could be.”
Generally, lease agreements span two to three years, allowing 12,000 to 15,000 driving miles per year. The lease will be set up through the dealership, working with the financial division to set up a payment schedule. With the wide flexibility of the varying lease deals available at each institution, discussing a budget with the financier will assure an agreement made to fit each situation. This flexibility is also a positive for the penny-pinchers or budget-tight dreamers who want the latest model with all the fixin’s.
Manufacturer warranties are available for all vehicles, and cover yearly maintenance and adjustments in addition to the supplemental warranties offered by the dealership. These warranties are generally effective for brake, belt and tire maintenance, which reduces additional cost exposure. And with the latest trends in computerized vehicles, the probability of breakage increases — another reason supplemental warranties are recommended.
“Everything that makes your life comfortable and easy, it can be expensive to fix,” Meyer says. Though the contracts were not always tempting for maintenance coverage in the past, he says, “Now, coverage is better and the customer tends to be more protected than they once were.”
At the end of the contract, the lessee can either buy the vehicle or hand it in and sign a new lease contract or find a vehicle for purchase.
“My experience at renewal time has been that many people really enjoy the vehicle by the end of the contract,” Lynch says. He notes approximately 75 percent of people who lease tend to move forward with another lease after returning the first vehicle, though he thoroughly analyzes each situation individually to discuss the next option. If the customer likes the last vehicle, he recommends getting into a new lease to get the updated version.
“It doesn’t make a whole lot of sense not to lease another vehicle of the same type at a lower price (than purchasing the car),” he says.
But the amount paid throughout the contract goes toward the final price of the vehicle, so all those payments throughout the years were not in vain, should the lessee choose to buy in the end.
What’s more, if the driver feels it’s time to get into a new vehicle before the contract is up, negotiation with a professional salesperson could conclude with a comparable deal fitting the financial and personal needs of the lessee.
Before returning the car to the dealership, Lynch says it is customary for the manufacturer to send a pamphlet to the lessee for review. In the pamphlet, guidelines are listed to confirm the general wear and tear on the vehicle — expected “dents and dings” on the body of the car. Anything not within the common use guidelines, Lynch and Meyer advise getting fixed before officially handing it over.
“If you’re considering turning the car in with wear and tear that is more than the minimum, and turning it in and then getting a new (lease), you’ll just have the amount deducted from the total of the new leased vehicle, rather than paying the total amount to fix it,” Meyer says. But Lynch advises customers get the vehicle appraised and fixed, if it needs cosmetic care. It will cost less than having the dealership handle the adjustments.
Additionally, Lynch recommends keeping the tires in shape by having them rotated often.
Mileage accrued over the allotted amount specified in the contract will come at a price, as well. Generally, the cost is around 20 cents per mile.
While there is no perfect time to get into a lease, if a car is leased during end-of-year or mid-year sales, the contract end date might also coincide with the same type of promotion.
“There’s no perfect science to it, that’s for darn sure,” Meyer says.
He notes the most common vehicle leased is the Toyota Camry, while Lynch says his dealership continues to see the Chevrolet Silverado, Malibu and Cruz leased most.
Though it is up to the car hunter to make the decision to buy or lease, with strong recommendations from local professionals, the leasing deal seems to appeal to many, particularly those who like to try a new car frequently without the worry of putting money into repairs and upkeep. Leasing is for particular lifestyles and not necessarily the majority of car seekers.
Both Meyer and Lynch suggest talking with a sales professional to determine the best option.