Lease - $0 due at signing meaning?

sad to say I did not bother to get their insurance but I will make sure to get one on my next lease.

Mr. Rock , not sure what you are thinking. Did you only lease for 1 year and you are facing a penalty for damage and you want to do it again?
Also you should go to your other posts and remove the links to the leasing company that has been flagged many times before.

From another thread

So which is it?

I think I should do a research well about normal wear and tear and excessive wear and tear. As learning from your situation, I think I should be aware of it too. Thanks for sharing your experience here. I will now put in mind that leasing a car is not that just easy. I need to be responsible on it. Thanks for the information here, at least, it gave me some tips.

Wouldn’t a better scenario be low payment and a HIGH residual value? Since your lease payment is based on the difference in the sale price and residual, a low sale price and a high residual would give the lowest payment with a given interest rate.

Well, if you were not planning on buying the car at the end of the lease then you are partially right. The most important thing would be to make the difference between the “price” and the residual as small as possible. But keep in mind, if you want the option to purchase the vehicle at the end of the lease, or if that is your intention, the best thing to do to is negotiate the lowest price and the lowest money rate (effective interest rate). This means that most of your lease payments will go to pay down the residual value and leave you with the lowest possible purchase price at the end of the lease.

Isn’t one of the reasons to least a car is to move on to another car once the lease expires? That’s why I leased a few cars.

At the end of the model year you can sometimes negotiate screaming lease deals as manufacturers seek to unload the balance of last year’s inventory. Leasing under these circumstances gives you a cheap lease with the bonus of a cheap option to buy the car at the end, if you like the vehicle. Otherwise you can just return it. It’s cheap, and flexible.

Flexible, Not really, cheap definitely No.

A lease is not a flexible financial instrument. It locks you into that car for the lease term with large penalties to get out of the lease. If you bought the car, financed or not, you have the flexibility to get out of that deal anytime you want for any reason. Buying seems more flexible to me than leasing.

As for the cheaper part. Lemme get this straight. You negotiate a cheap payment and a small residual so you can buy the car cheap at the end of the lease. right?

If you don’t buy the car, you’ve paid more per month than if you’d negotiated a high residual. That scenario only benefits you IF you buy the car. Otherwise it benefits the finance company.

So say you buy the car at lease end. You’ve paid interest on the sale price of the car of the car for, say 3 years. At the lease-end, you now buy the car for cash or finance it yet again for 3 years or so. Essentially, you’ve financed a car for 6 years or you financed a car for 3 years with a balloon payment at year 3. Either way you paid the bank a lot of money over and above the cost of the car.

Actually, your calculation only works if the “money factor” on the lease (effective interest rate) is much above zero. My plan is to buy the car AND the money factor on the lease computes to an interest rate of less than .5% for the three years. Since I have lowered the cost of the car significantly during the lease, my principal amount for the loan is much lower, which should keep my interest costs down. It’s all in how you do the math. The way I put it together makes sense, when I crunch the numbers. I only lose if the car gets returned to the dealer after the lease.

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If leasing didn’t return more profit for the dealer and manufacturer, they wouldn’t go to the trouble of doing it. Buy the car and keep it for 10 years if you want to save money. If you really want to save money, buy a 3 year old car and keep it 10 years. My Camry is 6 years old and has required no repairs. The biggest problem with it is it is a tan Camry and I can never find it in a parking lot.

No matter how you phrase it, the lease will cost you the difference between the retail price they want for the car and a stated value for the car at the end of the lease term. Whether you pay a down payment at the start and low payments monthly, or no down and larger payments, the total will be the same. The only variables are whether other costs (return fee, document fee, credit rating fee, inspection fee, registration, etc) are included in the lease (raises payments) or not, and the two big factors, what the sales price is and the interest rate (sometimes called the cost factor or some such nonsense). The problem is it gets harder to keep up with the fees and charges and things that get thrown around, because all the dealer wants to do is talk about the monthly tab. That’s why most advice is to negotiate the retail price first, then talk about a lease starting with that price.

People lease because it gets them a car at a lower monthly cost than a purchase loan, and three or four years seems like a long time from now. When the time runs out they get whacked for a return fee, all sorts of damage claims, and a dealer who knows they are desperate for another car and so offers them another lease. They end up paying monthly fees forever. If they went to a credit union and arranged a long loan in the beginning, or when the lease runs out they bought the car with a credit union loan and then drove it for years and years they would come out ahead, but a heck of a lot of people don’t want the old car, they want a new one, so they pay and pay and pay, and wonder why other people end up with more money than they have. And get resentful.

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