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1. AUTO LEASING is Back Memorial Day 2012

   05/15/2012 by MYCARLADY

   Auto Leasing is back, finally!

   This Memorial Day 2012 will see the official start of the car sales selling season with BIG auto lease deals in every brand.

   Let’s get one thing straight before you venture out to the car lot. It’s a SELLERS market.  Limited inventory, limited banking resources and huge demand. You need to be smart about your approach to car buying because the dealers are NOT desperate to GIVE AWAY cars and the banks are not dying to loan money to people with less than PERFECT credit.

   The leasing movement will help revitalize the industry and correct the drought of used cars by cycling 2 and 3 year old cars into the system over the  next few years, however, the new rules of leasing will surprise many car shoppers this selling season.

   THE NEW RULES OF 2.0.12 AUTO LEASING.

   Auto Credit scores MUST be over 720 to get the advertised rates, and anyone not holding the AUTO FICO of 700 can kiss their chances of leasing to the curb without 25% CASH down.

   Foreclosures, Short Sales and Bankruptcy eliminate your ability to lease a car without having already re-established your car credit prior to the lease.  Just because you previously leased luxury cars and paid the leases perfectly, DOES NOT GUARENTEE you will be able to lease again from the same car bank or another competing brand. The auto leasing banks are scrutinizing every line of the credit report, application, tax return and bank statements. Welcome to the new world of auto finance; you must be PURRFECT to play.

   CASH DOWN is important.  It was once thought that the point of leasing was to keep your CASH liquid, especially if you are a business owner writing-off your auto expenses for tax purposes.  Today’s auto leasing programs are pitched with serious cash down of $3995 PLUS  sales tax, registration, bank acquisition and dealer fees.  The hefty cash down or inception fees are capital cost reductions that not only lower the payment, but give the bank a reasonable hedge against default.

   LOWER MILEAGE limits vary with the term.

   Luxury car makers are offering mileage breaks for 5,000, 8,000 and an average 10,000 miles per year, which keeps the depreciation down, and helps drivers who own multiple homes and need a car in every carport. However, the typical drier needs to be reasonable about the number of miles he will need and what the cost is should he go over. Don’t be swayed by promises of early lease termination or pull ahead programs to get you out in the event of over-miles, the crystal ball and the salesman holding it could be long gone 3 years from now.  Buy an average number of miles for your typical annual use.

   GAP Coverage is a must, but not automatic in every lease today. Make sure there is GAP insurance in the lease contract to cover any difference in value paid by your insurance company and the remaining lease payments. GAP coverage is inexpensive compared to the potential cost to you without it.  Don’t agree to pay for it, UNLESS you see it is NOT printed on the back of the contract.

   RESIDUAL VALUE Does NOT equal BUYOUT PURCHASE OPTION: ALLY BANK

   Until 2010, most lease contracts had a line for the residual value and a line for the purchase option at lease end, and the number on each line was the same. There might have been a pre-printed dollar amount of up to $500.00 as a “fee”, but it was spelled out as such. Then came ALLY, the newly re-designated GMAC leasing arm of formerly General Motors bank. Their new auto lease contract packs a hefty $2500.00 onto the “residual value” to become the actual LEASE END Buyout Purchase Option. Don’t sign it if you think you will buy the vehicle at the end of the lease, demand a different bank where the buyout is more reasonable, and if this wasn’t disclosed prior to your trip to the finance department, be prepared to LEAVE, without the car.  This is NOT NEGOTIABLE at the end of the lease, (remember the crystal ball?). Granted you are not obligated to BUY the car at the end, but signing the contract before reading the fine print won’t undo the problem later.

   So as you make your list of possible cars from the television ads shouting at you… be ready with your checkbook, credit score and several different vehicle options should one or two not pan out.

   READ MORE: 3 tips for car shopping this Memorial Day season.

   READ MORE: USED CAR SPECIALS this MEMORIAL DAY Holiday Car Sales.

   READ MORE: Memorial Day holiday Car sales rebates, incnetives and more…

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   Sarah Lee Marks is MyCarlady. She has over 22+ years of experience.
   She writes about cars, and is a staunch consumer advocate on car related subjects.
   MyCarlady offers free car buying advice, and private, auto-related services to help you maintain your personal or commercial vehicles.
   Call Sarah Lee for more information: 702-521-7546
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   Category: Auto Loans, FINANCE: Loans-Lease-2nd Chance, Women Car Buyers
   Tags: 2012, ally bank, auto, auto broker, buyout, car, incentives, las vegas, Leasing, memorial day, MYCARLADY NEWS, new, over-miles, purchase option, rebates, residual, sales
   

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2. Memorial Day 2012- Used Car prices

   05/14/2012 by MYCARLADY

   I had hoped that used car prices would have corrected by this time Memorial Day 2012.

   The fact is, used car prices are extremely high in some sectors, mostly four to eight year old – 2008-2004 cars with under 100k miles on them, expecially imports like Toyota Camry, Honda Accord, Nissan Maxima, Altima and Lexus.

   

   Why are used car prices so HIGH?

   IMHO. The continued limitations on production of new cars, a somewhat bumpy economic recovery and mixed messages about the future of 2012 depending on which politician you listen to and Wall Street’s response to such. Parts, core materials and the dollar value in Europe and Japan have caused the cost of these items to rise, making new car manufacturers reluctant to make excess inventory. Right now the automakers are responding to dealerships confidence when ordering and the facilities ability to crank out so many new cars per day without increasing labor costs. The suppliers of parts must also fall in line with their ability to supply the airbags, switches, glass and rubber going into the cars.  When there is a lack of new car inventory on the dealer lots, people don’t trade their old cars, they wait.

   A lack of good used car trades…  lack of turn-over.

   Another issue is the lack of lease returns. In the past and up until 2008 there were lots of leased vehicle in the system, pre-determined trade-ins. We all remember 2008, it was the beginning of the Great Recession, as it is now called, not so GREAT, but I digress. The reality is, leasing came to a hault, almost. The lack of leased cars in 2008, 2009 and 2010, has effected the number of returning off-lease vehicles to the “used car” market.  In addition, those consumers who have leased vehicles are finding the residual value, aka: buyout, is less than the actual retail value of their car on the lot. Hence, the leasee is BUYING his/her vehicle and holding onto it for another few years while trying to decide what the future holds.  This is another reason ALLY and other banks are trying to charge huge “buyout fees” on their new lease contracts, to capture some of the profit on the low residual. But again, that is a story for another blog post.

   The only arena where I see some possible “deals” in the used car market is luxury sedans and coupes; BMW, Jaguar, Mercedes Benz, in the 3 series or C-class. 2009 – 2010 Jaguar XF, 2008-2011 Lexus ES350, IS350 and 2008-2010 Infiniti G37. Audi A4 and A6 are still high priced, as are Acura, Bentley. Porsche is hot and should only be purchased  from a CERTIFYING Porsche dealership.

   Earlier this year I had predicted the high-prices of used cars would pop by Spring, but I was wrong.

   Supply and demand, CONSUMERS PAYING THE PRICE, and banks lending, has kept the house from crashing, but as soon as the car makers get their production flowing, hopefully by 4th quarter 2012, used car prices will slide back to a more stable and sustainable level.

   However, be careful! If you don’t put much cash down, take a 72 mos. loan, or add negative equity to the new loan, make sure you have GAP protection on your loan. Gap protection will cover the “gap” between the balance on your car loan and the insurance company valuation, in the event your car is stolen or totalled!

   This Memorial Day, be prepared for the nice cars to have a premium price tag when sold from a reputable dealership lot offering financing and warranty, expecially on late model 2004-2010 used cars. The nicest ones rarely make it to the front line, so let the dealers know exactly what you are looking for and have the ability to move quick if they get one. Be careful of “unbranded” or “pot lots”, where the cheaper the price, the more likely the car has a problem, a salvage title or both.

   If you have any questions about used car or new car shopping, deals and holiday special offers feel free to ask MyCarlady.

   READ MORE HERE: 3 tips for Memorial Day holiday car shopping.

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   Category: Acura, Audi, Auto Loans, BMW, CAR MAKES, Jaguar, Lexus, Mercedes-Benz, Nissan, Porsche, Toyota, Women Car Buyers
   Tags: audi, auto, BMW, cars, dealers, gap insurance, INFINITI, Jaguar, las vegas, LEXUS, mercedes, MYCARLADY NEWS, used
   

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