INDIANAPOLIS - Car dealers want to get you in the door. Commercials are everywhere, just trying to lure you in. But is leasing right for you? RTV6 and Angie’s List have some tips on what to think about before updating your ride.
For many people, leasing a new car can be more attractive than buying new.
"When we compared both costs, we realized that we were better off leasing, and again, (we considered) the fact that we only wanted it for a short period,” Avon, Ind., resident Harmon Forgenie said.
Some auto experts estimate the value of a new car drops 20 percent the moment you drive it off the lot. Jeff Roush said this is common at his Tom Roush Lincoln Mazda dealership in Westfield, Ind., so the number of people leasing has gone up.
"We run anywhere right now from 40 to 50 percent leased (on) all our new vehicles," Roush said.
Lease payments are usually lower than loan payments. You could be paying between $160 to well over $1,000 for 36 months.
"Remember that when you are leasing, you're going to get a new car every few years, but you're also going to have a car payment even though your car payment is less than if you were buying the car," Angie’s List founder and CEO Angie Hicks said.
Before you lease or buy, or even walk into a dealership, make sure you know what you can afford. Experts say not to think only about the monthly payment; also try to think about the residual value of the car -- the price you would pay if you decide to buy the car out of the lease.
Angie’s List wants to make sure you fully understand the lease agreement before signing. Also, make sure you ask about gap insurance coverage. If you have it and the leased car is wrecked, it will cover the difference between the car’s actual market value and the remaining value on the lease.