Getting a new car is a huge step many of us need to take once a while. My intention with this blog posts is to give you a set of tips and suggestions of things you can do to get a good deal while closing it with a dealer.
#0 Know Your Credit Score
This is vital. Either for a Mortgage, Loan, leasing or financing a Car: you need to know your credit score. Lenders will take this as your primary source of "trust" to go ahead with your deal. Start right now and get a FREE Equifax Credit Score in only 2 minutes. Then, it will be easier to land on dealers saying "(...)I have 740 credit score and I want this deal(...)".
#1 Explore the market
Knowing the status of the market is the first most important step you have to take before going ahead with your purchase/lease. Just to mention a few samples:
- For some specific months, it is cheaper to lease a car like a Hyundai Elantra for 24 months than for 60.
- A KIA Sportage sometimes is cheaper to lease for 36 months than for 60
- The Nissan Rogue is way cheaper to lease than the Nissan Altima.
- Some Hyundai models are more expensive than some Audis.
- The cheapest car to lease in Canada is the Nissan Micra and starts for only 148CAD/month with taxes and everything included.
- Some automatic models are cheaper than some manual ones.
- With the money you lease a Dodge Durango, you can lease 2 Nissan Rogues or 2 Honda Civic for the same term.
And so on, I could write an incredible list of facts that are hard to understand without exploring the market options. So this is the first thing you need to do: explore the alternatives and take a decision based on the actual status of the market.
You can use our Lease Explorer to compare all car options available for lease in Québec to better understand the market before taking your first step.
#2 Avoid money upfront, especially on a lease
One of the main differences between a lease and a purchase is that when you put money upfront, you are taking a huge risk. During a lease, the car will never be your property. This means that, if in the future, your car gets stolen or totaled, your insurance will take care of paying it to "the owner".
This means that, if you paid money upfront, this money, that of course, reduced your monthly payment, won't be returned back. Just to mention an example:
Let's assume you leased a car for 36 months. The initial price was 305 per month, but for reducing your monthly payments, you made a downpayment of 2,000.
36 months x 305 = 10,980 - 2,000 = 8,980 / 36 months = ~249 per month
This makes total, sense, but let's see the worst case scenario: Your car gets stolen after the first month. Your insurance will take care of the responsibility of the remaining payments and the value of the car, but you will have loosed: 1 month (which you already paid) + 2,000 you made in the downpayment.
#3 Use your trade-in
If you own another car, while you are looking for the new one, you can also evaluate how much dealers are willing to give you to "get your business".
This works either for owned cars and so for leases. Yes, for a lease, this works too. Following, I'll explain you a sample of what you can do with a leased car:
When you are reaching the end of a lease term, let's say 3 months before the lease is over, dealers are willing to pay for your remaining months to "close" your current contract in order to "sell" you a new one. This is a very trending option nowadays and I strongly encourage you to take it into account when shopping for your next car.
#4 Be aware of Manufacturer and Dealer incentives
Every single month, manufacturers study their sale's behavior and prepare their offers for the market. The following is a list of examples that I made with the intention of illustrating how manufacturers push forward some specific models in order to get these rolling out of their parking:
- Between October and March, all previous year models (i.e. now is 2017, so all 2016 models) get huge discounts and incentives as the most customer base is looking for 2017 models.
- Submodels inside of the same line (i.e. Honda Civic DX Manual) which price is used as marketing, is almost not sold as most customers are looking for Automatic versions of it. If you are a manual vehicle lover, there is a great opportunity.
- The Nissan Rogue S, which is the base model, is the cheapest of all of the line, plus that it has the highest discount, as most models sold are SL & SV.
#5 Accessories cost, so make it last
I personally hate the idea of spending money on accessories for a car you will be returning in 3 years. If you are like me, and value a lot adding tinted windows, roof rack, having a remote starter and customizing your vehicle, then I strongly suggest you either of these 2 things:
- Get a long term lease. If it is a vehicle you will customize, then make it last. Makes no sense to pay for those components just for a while.
- Buy those outside of the lease. This will make these your property and then you won't need to buy those again after you return your car.
What is not an option is to pay for your accessories every 3 years.
#6 Get a Lease Protection Plan
If you don't want to spend the next 3 or 5 years worried about your dog jumping into the car, your kids dropping stuff and water at your seats or scratches caused by trees, stones on the road, vandalism or whatever, get a Lease Cover.
These range from 800 to 1,400 and cover between 5,000 and 10,000 on repairs and fixes, depending on the manufacturer and the model.
I would never suggest anyone take a lease without this coverage.
#7 - Don't be afraid to say your price
Even if it sounds ridiculous, tell the dealer how much are you willing to pay to get your car and which one you want.
Always listen to options and alternatives, but never be afraid to take your time and go home to think about it.
EXTRA - Don't be afraid to ask
Ask your friends, work colleagues, online... wherever you can, ask them for suggestions and feedback on the offer you are getting. The more information you gather, even from people not related to the automotive industry, will give you 2nd opinions on your offer.
