Re-Lease for Less

Car buyers are naturally suspicious of leasing, and no wonder. You need a glossary to decipher the terminology and the patience of a land tortoise to understand how the deals work. And evenmastering the vernacular may not do you much good. Dealers often balk at revealing the numbers behind the deal, so you end up having to negotiate on the monthly payment. The result: Many leasers pay too much.

The money factor

Enter LowerMyLease.com. The Web site exists to let leasers shop for a lower payment. At this site you refinance your lease, much as you'd refinance a home mortgage, without having to break the lease and turn in the car, which could trigger early-termination fees. Nor do you have to find another person to lease the car and take over the payments (a process called lease assumption), which could also involve hundreds of dollars in fees.

The secret behind the lower payments is the money factor -- leasing lingo for the interest rate (to get the annual percentage rate, multiply the money factor by 2,400). "People have been getting killed on the rate at dealers," says Tarry Shebesta, president of Automobile Consumer Services, the Cincinnati car buying and leasing company that runs the site. LowerMyLease.com's customers pay a rate slightly higher than it has to pay, but not as high as most dealers charge.

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Here's how the process works: From the pull-down menus, select your model and the lender for your existing lease. The phone number of the lender is supplied, so you can call and get the lease's current payoff. Then you pick a new lease, assuming you find a better deal. "You may be able to lower the payment, shorten the term with the same payment or get the same term but with a lower payoff," which allows you to buy the car for less at the end of the lease, says Shebesta. After you qualify for the new lease, the service sends you a new contract and pays off your old lease.

Say you leased a 2005 Acura TL a year ago for 48 months with payments of $577 per month and a current payoff of $30,000. One quote features a 36-month lease with a monthly payment of only $508. The main difference is a low money factor that translates into a 5.5% rate.

Current leasers aren't the only ones who can use the site. If you're still making car payments, the service will even buy your car from you and write a lease on it.

Smart lease shopping

If you're in the market for a new car and are considering leasing, check out another site run by the same company: LeaseCompare.com. Leasing makes sense for most people who trade in before they've paid off their car loan. And after a few years during which leasing companies retrenched after getting burned on too-generous leases, finance companies are again making attractive lease deals.

LeaseCompare.com makes the transaction transparent. You start by choosing a car -- either a new model or a late-model used vehicle. Then you have two options: Shop for a lease using a market-based price for the car, which LeaseCompare.com provides, or shop for a lease based on a price you've already negotiated with a dealer.

Suppose you're shopping for a 2006 Acura TL, which has a base sticker price of $33,940. You choose LeaseCompare.com's market price, which is $32,340. Next you pick a term -- 36 months is a good choice because during that time repairs are covered under warranty and you aren't likely to be faced with maintenance expenses, such as replacing tires. The lowest payment, assuming you don't put any money down, is $517, from the lender with the lowest money factor.

One caveat about LeaseCompare.com: It currently doesn't provide quotes on leases offered by carmakers' so-called captive finance companies. To check out subsidized leases, go to Edmunds.com, get pricing on the car you want and click on "Incentives."