Buyer Question: Where should I obtain my vehicle lease financing?
Comment: Today customers have several options for financing the lease of their new vehicle e.g. 1) local bank, 2) local credit union, 3) Internet financing sources, and 4) the dealership where they find their vehicle.
Buyer Tip: Always obtain a Live Lender Lease Quote from LeaseWizard at www.leasewizard.com before visiting the dealership. Cost is only $12.00. Also obtain a pre-approved lease from a financing source e.g. Internet Financing Site, Bank, Credit Union before visiting the dealership.
If required, LeaseCompare will also find and negotiate the price of the vehicle for the buyer. See Purchase Options-New Vehicle, Buying or Leasing a Vehicle Online.
Bank and Credit Union. Not all Banks and Credit Unions provide lease financing. If applicable, apply for lease financing at several local Banks and Credit Unions. Determine if their money factor, interest rates for the same lease term (length in months), residual value, details of amount due on signing and fees are equal to or better than the Internet sites
Dealership. If you are considering lease financing your vehicle through the dealership you should know vehicle lease financing is a large source of income for the dealership. The contract you sign at the dealership will be sold by the dealership to a lease funding source. The dealership often participates in the financing with the funding source by adding an interest surcharge, of several percentage points, to the customer contract.
Buyer Question: Will applying to multiple lease financial sources negatively affect my Credit Rating?
Comment: According to Fair Isaac Corporation, who developed the FICO credit rating score, “most credit scores are not affected by multiple inquiries from auto … lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score.”
The following steps take approximately three hours and could save you up to $1000-3000.
1) Purchase the LEASEWIZARD® KIT from LeaseWizard at www.leasewizard.com to compare lease offers from Internet lease financing sources, Banks, Credit Unions and dealerships. The kit includes lease data, vehicle pricing data, the book on leasing titled “Look Before You Lease: Secrets to Smart Vehicle Leasing” and a six pack of quotes for one vehicle.
2) Apply for vehicle lease financing at an Internet site, such as, LeaseCompare at www.leasecompare.com.
3) Apply at your local Bank and Credit Union, if applicable. (1 hour each).
4) Compare each pre-approved lease’s terms and conditions e.g. money factor, interest rate, length of loan, residual value, details of amount due on signing, fees, length of approval period, length of the interest rate lock period.
5) Determine if the financing sources require you to be covered by GAP insurance, credit life insurance or credit disability insurance. The dealership may falsely advise some or all of these items are required by your financing source.
5) Include the best pre-approved vehicle financing lease(s) in your Buyer Information Folder.
Comment: Absolutely … remember you are under no obligation to use your bank, credit union or Internet site’s pre-approved lease financing. If the dealership offers a better deal, take it and save some additional money. Just make sure it is a better deal.
Dealership Trick: Dealerships have been known to focus the buyer on a lower monthly payment while extending the term of the lease.
Buyer Tip: A better deal is not necessarily lower monthly payments. A better deal is a lower interest rate for the same lease term (length in months). Always compare the dealership’s money factor, residual value, interest rate and lease term against your pre-approved lease’s money factor, residual value, interest rate and loan term the dealership’s offer.
Classic Dealership One-Liners regarding financing new vehicles …
“We can get you the best interest rate from one of our 50 funding sources.”
Comment: Maybe! Check the dealership rates against your pre-approved rates from the Internet financing source, local bank or credit union.
“We can’t sell you the vehicle at the agreed price unless we finance it.”
Comment: Remember they are not the only place which sells this model of vehicle.
“Hmmm … your credit scores are lower than we expected. Our financing source is going to expect a higher interest rate on your loan.”
Comment: Did you obtain financing from an Internet source or a local bank or credit union before going to the dealership?
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