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What You Should Know about Car Dealers by Exforsys
October 14, 2006 on 2:15 am | In USA, car lease, car leasing, lease, leasing, car auto leasing, auto lease, autoleasing, auto leasing | No CommentsWhen you finance a vehicle, you will sign an agreement with the dealer saying that you will pay it off within a given period of time. The time it generally takes to pay off a car is five years, but some take as long as seven years. Until you have paid off the entire cost of the vehicle, it will belong to the dealer or the company that financed it. While financing a car is usually more expensive than leasing it, financing a vehicle comes with few restrictions.
Never let a dealer talk you into financing a car for long periods of time if you plan on putting a lot of mileage on it. The reason for this is because if you put a lot of wear on the car and then try to trade it within a short time, you will owe more on the car than it is worth. This is called negative equity, and you must pay the difference to the dealer. The only way you can avoid this is by getting gap insurance. When you work with a car dealer, you will need to know your credit report. Your credit report can give the dealer information about how you pay your bills, and it will also show how much debt you carry.
Your credit information is sent to various financial institutions by Equifax, Experian, and Transunion. These financial institutions will use the information provided by the credit agencies to determine your level or risk and give you an interest rate which is related to it. Those who have 0% APR are people with who have an excellent history of credit. If your credit is average, you will be given an average finance rate by the car dealer. If you have excellent credit, you will be given a finance rate which is typically lower than 10%. If you have an existing vehicle, many car dealers will do what is called a trade in.
They will estimate the value of your existing vehicle. Once they have it, they will put it towards the total price of the new car. For example, if you want to finance a car which is valued at $15,000, and you already own a car which is worth $3,000, it can be used as a trade in to lower the price of the new car to $12,000. Educating yourself about how to buy a new car will make things a lot easier.
Unfortunately, some car dealers take advantage of people who don’t know how to buy new cars. This especially applies to young people who are generally inexperienced. By knowing your credit score and the type of car you can afford, you can avoid being pushed into cars that you can’t afford. One thing that you should never do is lease a rental car from a car dealer. If you find a car on the lot which is cheaper, make sure it wasn’t used as a rental. Rental cars tend to have a large amount of wear, and will break down much faster than vehicles which have never been driven off the lot.
SouthEastDealers.com provides Automotive Information, Car Dealers and leasing contact information with around 40,000 listings from United States and Tips on dealing with Car Dealers, Saving Money with Insurance Premiums. Please visit http://www.southeastdealers.com for more information.
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How to Buy a Car at the End of Your Lease by Alex Fir
October 14, 2006 on 2:08 am | In USA, car lease, car leasing, lease, leasing, buy a car, car auto leasing | No CommentsYou have come to the end of your auto lease and you enjoy you automobile enough you want to buy it. However, you must do some research in order to get a great deal.
To begin with, you should find out the cost of buying out your lease. Read the fine print of your contract and try to find the “purchase option price”.
The price is established by the leasing company and typically includes the residual value of the car at the end of the lease as well as a purchase-option fee ($300 to $500).
When you signed the contract, your monthly payments were calculated as the difference between the car’s price and its expected value at the end of the lease, and also a monthly financing fee.
This estimated price of the vehicle value at the end of the lease is called residual value. It is the loss in value of the car over the lease period. For instance, a car which costs $40,000 and a 50% residual percentage will have an estimated $20,000 value the end of the lease.
Once you know this, you must find out the actual value, also called market value, of your car. In other words, how much does your vehicle retail for in the market? To identify a good, reliable estimate you should carry out some pricing research.
Check the price of the car, with similar condition and mileage, with several dealers. Visit web sites, such as Cars.com, Edmunds.com as well as Kelly Blue Book for detailed pricing information. This will give you a reasonable estimate of your car’s retail value. Now, you need to compare the two amounts. If the residual value is lower than the actual retail value, you have a winner. However, there is a good chance a vehicle coming off a lease is on the high side.
Do not lose hope though. Leasing companies are familiar with the fact that residual values on their cars are greater than their market value. Because of this, they always try to find fair offers. You can reduce the price of your leased car with some persuasive negotiating tactics.
Go to these web pages to learn more about Leasing versus Buying a Car as well as How to Get Out of a Car Lease.
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