I’m currently leasing a GMC Terrain Denali ending in May, and I’d really like to (but don’t need to) trade in my car early. I’m not too familiar with the pull-ahead programs, but there’s an offer in Buffalo for a 2017 Equinox, 169/mo, 24/mo 10K/mi., and I’m wondering if I should look into this. A few of (dumb) questions first:
Does the dealership I am buying from (Chevy) pay the other dealership (GMC), or would they pay/reimburse me after I terminated the lease?
Typically there are penalties to terminating a lease early; do these apply in most of these situations, and if so, who typically pays them?
In the ad, it said total due at signing was a little over $2K, but it also says $0 down, including a $595 acquisition fee. Besides first month’s payment, what else would be included?
I hear people say on here a lot you should never pay any money down on a lease; does that include things like acquisition fees? i.e. are you saying when I lease a new car, I should only be paying first month’s lease payment + taxes and that’s it?
The GMC dealership no longer has any ownership of the car. It belongs to the financial institution that you make your lease payments to. Let’s assume it’s GM Financial.
Because these brands are all financed by GM Financial, what would typically happen is that GMF waives the remaining payments as part of a pull-ahead program. The GM (Chevy, Cadillac, GMC, etc) dealer selling your new car does not have to make any payments, and neither do you incur any penalties.
You should ask for the breakdown. Often that money can include a big fat doc/processing fee but in NY state that is limited to $75 AFAIK. If there is a dealer fee being charged under a different name, you should report it to your Attorney General.
Ideally that 2k includes your taxes and DMV fees (but ads often have fine print saying those are additional). Buffalo seems like an unlikely place to have out-of-state buyers so maybe the ads assume all buyers are naturally NY residents.
This is a source of contention but 99% of lessees seem to believe in the same groupthink. Be prepared to be indoctrinated with all the zeal of a Maoist revolutionary.
Put the taxes into the lease as well. That is less money you are out if the car is totaled. GM Financial includes gap insurance in their lease, so there is absolutely no reason to put any money down except for 1st month payment. GM Financial may even waive the 1st month payment for certain models.
Are you saying this is an option I can ask for when negotiating?
GM Financial includes gap insurance in their lease, so there is absolutely no reason to put any money down except for 1st month payment.
Sorry, not sure what you mean by GM Financial here… My expiring lease is GMC, and it was through US Bank. Are you saying the new Chevy lease could potentially be trough GM Financial? Sorry if I’m being dense here.
I know we have been over this already, but having thought about it a bit more and assuming there is GAP insurance in the lease, putting down money (CCR) can make sense if the interest rate on the lease is high. It obviously saves you quite a bit in interest if that is the case. If the interest rate is very low then it does raise the question if it is worth it from a financial saving point of view. Some people like lower monthlies and might be flush with cash at one time of the year so can put a chunk down.
Also, the risk of losing all or part of your CCR, should you write off the car, is much higher that the beginning of the lease as that is when a large proportion of the deprecation happens. @max_g is correct in saying that it is a personal choice and as long as you are informed as to the pros and cons it is up to you. I don’t think there is anyone on here who would argue otherwise, so perhaps a minor over exaggeration to prove a point with the Maoist comment ;).
We are only talking 2-3 years of interest at between 0-4%. If you total the car after 3 months, you have not even paid but a few dollars of interest, but you’ve saved yourself a few hundred or even thousands by not putting down any money. Just my opinion and of course your mileage may vary!
But 99.9% of the time you don’t write off your car. So $5k down at 5% (Which is at the higher end of the lease interest rates) is a $750 saving over the 3 years. I do agree that writing off your car at the beginning of the lease is a worst case scenario and very unfortunate.
Point is there is no single rule that works with CCR and it is up to the individual. Personally I like a lower monthly payment but I try to achieve this by using MSD’s and only leasing cars with high residuals, low MF and good rebates. I really want a Camaro 2SS but they are a horrid lease right now and I can’t work out a way of getting the monthly below $500 or anywhere near the 1% rule of thumb.
With a lease pull ahead program, if it is run by the dealer then surely all it does is eat into the discount they could otherwise give you?
Obviously if it is run by the manufacturer/finance company then it could be a great deal if you want to exit early, allowing you effectively write off your final payments at no cost to the dealer.
That would be my understanding, too. The exception would be if the dealer would value the car at or above payoff, and buy it out from the finance company w/o any neg. equity
