People with previous car leasing experience will know the right questions to ask the dealer and what to do to get the best deal. However, for those new to car leasing, the lack of experience can often leave you in the dark and paying hefty monthly installments.
If you’ve got your eyes set on a Dodge Durango, such as those from NYE Auto, then kudos to you! It’s a spacious and powerful vehicle with plenty of cool features. Furthermore, luxury cars are cheap when leased. But, before you can take a lease on your Dodge Durango, here’s a few considerations you need to make.
- Upfront Charge
Some dealerships will ask for an upfront deposit or drive off fees. The benefit is that it lowers the cost of monthly installments. However, if something was to happen to the vehicle, such as being totaled or if it gets stolen, your insurance company may not pay back the drive off fees.
This is something that people with car leasing experience understand. Moreover, they prefer to just pay the agreements fees and the first month’s installment. Then, they spread out all other costs in the monthly installments.
If you get an unbelievable great deal on your lease, it’s important to read through the agreement as often since some deals come with large deposits.
- Check For Any Lease Offers
Many car dealerships will provide some special lease offers since dealers will use this strategy to boost sales. For example, you might get discounted rates on the monthly installments.
Granted, this can end up saving you a lot of cash. However, it’s not that simple. Such offers are usually only available to people with a high credit score or individuals who have taken a previous lease. Also, such offers will often not include registration fees or sales tax costs. Therefore, always read the fine print of the lease agreement.
- Contract Fees
It’s important to understand all of the fees involved in the lease agreement. While you’ll get a waiver on some fees, such as the deposition or acquisition fees, you may be able to negotiate on costs, such as the security fees.
Secondly, you understand just how much you need to pay. The last thing you want is to pay extra fees that you were not aware of.
- Residual Value of the Dodge Durango
The monthly installments for your Dodge Durango will depend on its residual value. This is simply the value of the vehicle after the duration of the lease. The dealer calculates the residual value from the manufacturer’s suggested retail price.
Assume your Dodge Durango has a residual value of 60% after 3 years. This means that with an MRSP of $30,495, the car will be worth $18,297 in 3 years. The dealer will calculate the residual value from the difference, which is $12,198.
The monthly installments for the 36 months of use will be $339. Note however that this is exclusive of sales tax and other agreement expenses.
- Interest Rate
When talking about car lease, it’s important to know what the money factor is since it’s a term commonly used. Many people interpret it as the interest rate. However, the money factor is not quite the interest rate. You may get a money factor of 0.00125. To convert this into an actual interest rate, simply multiply it by 2400. In this case, your interest rate will be 3%.
Often, the interest rate will depend on your credit score. The higher the credit score, the lower the money factor.
As a tip, always ask about the money factor and convert it into an interest rate.
- Check The Annual Miles For The Lease
Many dealers may offer you a great lease on your Dodge Durango. But, after a closer look at the text, you notice that you have limited annual mileage. Some leases will only allow you to travel for 7500 miles a year, while others can be as high as 12,000 miles.
Many times, they can tweak the figures for more mileage, but this also means that you’ll pay higher monthly installments.
Start off by considering how you plan to use the car and come up with a rough figure of how long you’ll have traveled in a year.
Conclusion
A car lease is a good idea if you only want to use a car for a specific period. While the process of leasing a car can sound complicated, with good credit score and the right knowledge, you can drive out of the dealership with your Dodge Durango at the best deal.
