Don’t Leave Your Money on the Table

Many people have leases coming to termination this time of year. I have heard from many of my listeners recently wanting advice on what to get for their next vehicle. Several times lately, when I ask them what they plan to do with their current vehicle, the reply was something to the effect of “just turning it in and walking away.” None of them had done any homework to see if they actually had equity.

In fact, for years, people who leased over and over just turned their leased vehicles in without even checking the value. Everybody in the industry knew there was no need; the actual value was ALWAYS less than the residual value with rare exception. But all that has changed now and I am seeing more and more people who have money left over and don’t realize it.

I would tell you, too, that if you are in the market, and are not a high mileage driver, you should look hard at leasing in this climate. After hitting a six-year low in 2009, leasing has gained momentum each year since then. Right now, leasing stands at around 35% of the new vehicles sold in 2016.

Just about all the automakers have lease specials right now that are intended to lower lease payments. Even the domestic car companies are getting into it. These incentives will give you a lower lease payment or allow you to get a nicer car than previously thought. Plus, you only pay for the best part of the vehicle; its first three years and you avoid a lot of the maintenance costs you have to absorb when you buy.

With the exception of people who drive more than 15,000 miles per year, or close to it, I think smart money today is on leasing.

Reprinted from Car Pro.

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