NEVER TALK ABOUT YOUR BUDGET
Never, ever, under any circumstances tell a leasing company what you are willing to pay!
In the world of car leasing, if you tell the leasing company that you are interested in a new Audi A4 and you’re willing to pay £400 per month, how happy will you be when they come back with £385? You’d be over the moon like anybody else.
Unfortunately for you, when the monthly rate was calculated it actually came out at £330…
However, since you’ve already said what you are willing to pay, the price has been amended to be more in line with the £400 you discussed initially. Over a 4 year lease, this would be a massive £2,640 extra that you’d be paying!
Unfortunately, there are a lot of leasing companies that prey on consumer ignorance. It’s why you see different companies charging different prices for the same vehicle.
A Ford Focus Titanium on a 36 month lease, covering 10,000 miles a year with a 3-month deposit should cost the same with every company right? After all, the manufacturer’s list price is in the public domain, so you know how much the Focus costs.
The Residual Value (RV) is provided by an independent 3rd party who has no association with the manufacturer or the leasing provider. So why on earth do they cost more with certain companies than others?
It’s because they can…
The lease price is more expensive from one particular leasing company because:
- They like to rip people off
- They get terrible discounts from the manufacturer
- Competition from a rival forces them to charge a similar monthly rate
- They don’t underwrite their own RV’s
- The interest rate (borrowing) on the capital is too much
- They don’t buy in volume (less discount)
The lease price is cheaper than other companies because:
- They get really good discounts from the manufacturer
- They buy in volume
- They’re a market leader
- They have a great reputation
- They understand asset risk
- The interest rate is really low
You have to ask yourself why car leasing companies price cars the way they do.
Is a price more expensive per month because they’re a more reputable company or is it because they want to rip you off?
Sometimes it’s not always best to go for the cheapest car lease, primarily because the customer service that follows might not up to scratch. Likewise, if you go for a more expensive lease with a more reputable company, you might get a better all-round service. Swings and roundabouts.
There are lots of things you can do to mitigate the risk to yourself. Here are a few to think about:
-This is going to sound like we’re peddling our own service, but the reason Car Leasing Guru was set up was because of the huge disparity between monthly prices on the same vehicles – It was built to help people. We’d recommend you start with us first, get an understanding of a fair market price and then shop around from there.
– Let leasing companies fight for your business, pit them against each other. You aren’t obligated to lease a car at any point, but you can certainly ask them to provide you with a quote on one. Enquire with another leasing company and send them the quote, see if they can get it even lower. It works, trust me.
If you absolutely have to, just give the leasing company the price range you’re looking at; say £200-£250 per month.