Okay, our second lesson in "lowballs" is not about price but about understated PAYMENTS in a dealers ad. It would seem that this is all pretty easy to figure out, and it is if you know all the rebates, term of financing and interest rate but the payment that is particularly hard to interpret is a lease. Why? Because there are so many factors that go into a lease and there is one word that has many meanings. That word is "DOWN"

DOWN can mean feathers off of a goose, money that reduces the amount you are financing in a standard payment or the reduction of the capitalized cost of a lease. "0 DOWN" does not mean $0 out of your pocket. To understand why I have to discuss "cap cost".

Simply stated the "lease capitalized cost (cap cost) " is the "selling price" the dealer is using in the lease. Most people do not know you can negotiate this price but you can. Dealers will advertise "$0 DOWN" but that does not mean $0 out of your pocket. That only means that you do not have to pay any money towards reducing the selling price of the vehicle. There may be tons of FEES  you have to pay to start the lease or to turn the lease in.

You may have to pay a "bank fee or acquisition fee", ($895?), security deposit ($600?), taxes ($900?) and a termination fee if you do not buy the car at the end of the lease ($600?). The dealer can have all these fees and technically advertise "0 DOWN" because none of that money goes to reducing the "cap cost".  ! Be careful!

Be mindful too, that if you contract for a low mileage lease and go over your allowed miles the fees may choke you. Consider the following:

If you drive 15,000 miles per year, after 3 years you will drive 45,000 miles. If you signed up for a 10,000 mile a year lease (like most dealers advertise) you were only allowed 30,000 miles.  At a  20 cent per mile penalty you will have to cough up $3,000 (15,000 extra miles x .20 = $3,000)

At Genesee Valley we never hide behind "0 DOWN" and always make every attempt to get you into an affordable payment at a miles per year that fits your lifestyle!            

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