Those Zero Down Zero Out of Pocket Car Deals
Has anyone gone for those zero down, zero out of pocket, $199.00 a month type lease deals that these car places come up with from time to time? If so, was it what was advertised or a total rip off once you're there at the dealership?
Vito Corleone 
Bug3Don Vito, it goes without saying that it is a total rip off.
Actually, I have never heard of such a deal but I do not lease my cars.
kb2755 Vito Corleone wouldn't have to worry about it.. they would make you a deal you couldn't refuse..
JrzyGirl88 Be careful. If they throw in the words" low mileage deal", you will totally get nailed with a huge fee when you turn in the car. Their low mileage deal is about 5 miles allowed per day. Ridiculous. Much better off buying a second-hand car, and then your car insurance will be a lot lower too.
Lili Low mileage is usually 10,000 miles a year. That is 27.3 miles a day. Doable if you work from home or close by your home. Don't use it for vacations or visiting far away relatives. Kind of limiting but if your budget is that tight you need a lease like that then maybe other options like used may be better.
MK get a used vehicle ( buy thru credit union ( always better rates ) , then purchase extended warranty thru c' union ( just check that dealership , local shop accepts ) .
New vehicles are way too much !
Steven I love how everyone responds to the ops question with advice on what they would do, without knowing why they asked . My answer is go to the dealer and find out for yourself. You cannot be ripped off (deceived perhaps) by an ad
eapos https://www.autotrader.com/car-tips/leasing-a-car-the-drawbacks-of-a-zero-down-lease-225688
Here’s an article on the subject - I wouldn’t go to a dealer and ask because they have no incentive to advise you in a manner befitting your best insterests
Skippy I guess the short answer is that the advertisements are a 'bait and switch' tactic. You need to be prepared to push back when you are at the dealership.
Make sure to bring the ad with you and hold your ground!
scottso Learn about residuals and money factor and how they determine the cost of the lease. Those 2 things, along with the price (both msrp and negotiated cap cost) will give you the approximate payments.
$199 is 100% possible depending on the car. A small Hyundai or small Kia will be even less money. People responding "bait and switch" are clueless. I lease a luxury car through my company every three years. I do all the negotiating through emails and on the phone. I go to the dealer one time- to pick up the car.
Let's have an example. I helped a friend with a lease of a new Altima. Price was $25,xxx and we negotiated to $21xxx (negotiated plus factory incentives). The residual was a steal at 65% (this means Nissan says the car will be worth 65% of its new value after 36 months and 30,000 miles). The MF (like interest rate) was, if you can believe it, .0003.
His lease, INCLUDING monthly tax, tags, registration was $229/month (zero down-never put money down on a leased car. If you drive off the lot and total the car you'll be out that down payment). The only thing he paid at drive-off was $229 for the first months payment. That's a 25,000$ car. So, yes, $199, depending on the car, could be easily legitimate.
Agreed.
All deals are really just a matter of doing the math and seeing if said math fits your financial lifestyle..
As noted above, leases are for certain types of driving behaviors. Exhibit "wrong behavior" and you are penalized.
I was thinking about leasing my next car given I can reduce the mileage for it and thinking a new fancy car every few years might have a "fun" value to it too. You know, just a fancy General Lee for slow cruising on Main Street on Friday nights before joining the other cruisers parked outside the brew pubs.
Leases, loans, no money downs, etc. are just moving the hockey puck about who holds the asset. If really low monthly, then either higher price, interest rate, time period or some combination. You don't have to go MBA to compare, just use straight-up bank loan as benchmark for monthly rates and total bill.
strangerdanger Consigliere, what about the tax, title and registration fees? On other leases that I have negotiated, I had to pay those fees. Usually I have to pay first month payment, taxes, title and registration. These seemed reasonable to me, but I always wondered if it was necessary.
I do understand how leases work. You take the negotiated price of the vehicle, or MSRP if you don't want to negotiate that. Then you get the residual value. The difference between the two is what you're paying on your lease. Find out the money factor, convert that to an actual rate, and do the math to get your payment based on 36 months. My question came up because these "special" holiday deals I always see advertised on TV, make me question how they can offer those prices. Incentives, I'm sure. I have seen Honda offer zero everything with a low monthly payment. It sounds too good to be true. If grandma Corleone taught me anything, if a deal sounds too good to be true, it usually is! :-)
I work at a local dealership and the truth is that we hate those national ads just as much as everyone else does! Always read the fine print and know what vehicle you are going into the dealership for. The $0 down, $199 a month plus tax, tags, fees and your first child are not ads run by your local stores!
If it sounds too good to be true it probably is. Call your local dealership or stop in with a copy of the ad so we can see which vehicle and specs we are working with. We ALWAYS honor the ads at my store if the vehicle you come in for is available or if we can locate one for you.
Jenn @ Johnson Dodge Vito - While you know about a lease and residual value calculations, you left out one of the most critical parts of a lease besides the length of time. That's the mileage. People that are used to buying instead of leasing do that all the time. Part of the no money down is also about your credit score. Since you won't own the car, a first and last month security are more about whether you can be trusted to pay it back and not about the value of the car. Most of those leases in the fine print say subject to credit approval. With a good credit score, many leases will waiver the last month and security deposits.
One of the particulars about a Honda is the residual value is very high. The brand has one of the highest resales out there. It's another reason to be careful not to compare it to buying.
As other suggest in one way or another - its all about being an educated consumer. Leasing is different and you really need to know that as a different market to make it work for you. Sometimes those leases are very aggressive because they need to move inventory quickly if it's backing up. Other times leases aren't what they seem because they're close ended, ultra low mileage, etc. etc. which can be a killer depending on your personal situation.
To borrow a phrase - YMMV. ;-)
GC You can lead a horse to water....and then they'll drink the slop the local dodge dealer is feeding them lol.
Hey, Jen. You hate those national deals? Gee, I wonder why. Let me guess, you'll be able to help him get into the same car for more money? Do tell!
Good luck, Vito.
GC, you're right about the mileage and terms. I left that out, but was not overlooking it. I understand it's important.
I would not lease if I could avoid it. Right now, I'm being cheap and I only want to spend $150.00 - $200.00 maximum for 36 months. I can't buy used for that and get a dependable car.
Commenting is no longer available.