Lease or Finance a car - are you getting scammed??
When you lease/finance - do you recalculate the interest rate?
If you don't check the rate, the interest rate the dealer is giving you might not be the rate you are actually paying.
You negotiate to buy a car - cost is $25,990 + freight $1828. At 2.99% interest over 4 years the dealer says that’s $361.53 with a $12,962 buy back.
RULE OF THUMB: Negotiate on the Total cost, not the monthly payment.
You negotiate it down to $24,000 - pretty good deal. Interest rate is 2.99 % for 4 years. Your lease payments are now: $340 per month.
How do you know the $340 is correct? How do you even know how the $361.53 is correct?
You probably don’t. You need to calculate it. The correct answer is if you negotiate it to $24,000, the monthly payment should be: $307.59.
I’m probably confusing you - all I’m saying is DON’T TRUST the monthly payments they give you. Let's calculate.
What I do to check the monthly payments in a calculator - try: http://www.calculator.com/pantaserv/lease.calc
Take the information from the quote:
- FINAL NEGOTIATED PRICE ($25,828 = 24000+1828 freight)
- DOWN PAYMENT ($2,000)
- TRADE IN VALUE ($0)
- SALES TAX (13%)
- LENGTH OF LEASE (48 month)
- NEW CAR LENDING RATE (2.99%)
- BUYOUT VALUE ($12,962.45)
- enter that in the online calculator. What does it give you: $307.59
So using what the dealer gave us: $ $340.00
Payments should be $307.59 per month. which would give a difference of $1,555.68 over 48 months. In essence they are giving you a 4++ % interest rate, rather than the 2.99% agreed on.
WHEN AT DEALERSHIP
So what you need to say is -
a) The payments don’t make any sense. They should be LOWER. Show them the online calculator.
b) be very careful when at the dealership they add “other charges” to the FINAL NEGOTIATED PRICE. They tried that with me.
So this is probably way too much numbers. Key is - you’d save yourself $1,555.68. Be careful of the scammers out there. Both a domestic dealer and international dealer tried to screw me, I had to explain to them the numbers.
GOOD LUCK! HOPEFULLY THIS HELPS. CHECK THE NUMBERS!