It seems like there are always advertisements for auto lease specials on new cars. You will hear that a particular dealership will pay off your current car or lease, and you’ll be able to drive off with a brand new car – while making smaller monthly payments than you are currently.Many will flock to car dealerships to take advantage of the alleged great deals. In fact, many shoppers will respond when they currently owe more on their auto loan or lease than the car is actually worth.Leasing a Car With a Trade-In
If you attempt to lease a car or truck and your present vehicle is not yet paid for — you may be asking for trouble. These days, most car buyers buy or lease vehicles with as little down payment as possible. Therefore, most car loans will reach a point to where they exceed the vehicle’s actual worth. With leases you’re not actually purchasing the vehicle. You’re really just renting it for a specific period of time. Ending a lease before the specified term can often result in serious penalties and surcharges. Often times, many people are not even aware of these charges until it is too late.If you have good credit, you can often trade-in your used car, even if face serious lease termination penalties. The dealership will simply include any additional balance amounts or lease-related termination penalties into your new loan. Because you are leasing the new car, the monthly payments may appear to be somewhat low. This is because you won’t own the vehicle at the end of the lease. In reality, you are still paying for the old loan or lease it was released from. Without the trade-in, the payments would be much less.