Re-Lease for Less

published 31 March 2006

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.

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Row 0 - Cell 0	Should I Lease or Purchase a Car?
Row 1 - Cell 0	What Will My Car Lease Payment Be?
Row 2 - Cell 0	Kiplinger's Car Finder
Row 3 - Cell 0	More Stories by Mark Solheim

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.

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.

Topics

Features Buying & Leasing A Car

Mark became editor of Kiplinger's Personal Finance magazine in July 2017. Prior to becoming editor, he was the Money and Living sections editor and, before that, the automotive writer. He has also been editor of Kiplinger.com as well as the magazine's managing editor, assistant managing editor and chief copy editor. Mark has also served as president of the Washington Automotive Press Association. In 1990 he was nominated for a National Magazine Award. Mark earned a B.A. from University of Virginia and an M.A. in Writing from Johns Hopkins University. Mark lives in Washington, D.C., with his wife, and they spend as much time as possible in their Glen Arbor, Mich., vacation home.