Sign and Drive Lease Deals May Not Be a Deal

GoBankingRates Examines Leasing Practice

Leas­ing isn’t for every­one – Cars.com reports that accord­ing to CNW Mar­ket Research, near­ly a fifth of dri­vers, 18.5 per­cent, choose to lease their vehi­cles instead of tak­ing out an auto loan. But with no mon­ey down required, sign and dri­ve lease deals can seem like sim­ple and cheap way for con­sumers to get behind the wheel of their dream car.

How­ev­er, in its lat­est report, GoB­ank­ingRates finds that “sign and dri­ve” deals aren’t usu­al­ly as con­ve­nient or cost-effec­tive as they’re adver­tised to be.

“The first thing you’ll dis­cov­er is that, unless you have an impres­sive cred­it score, it’s going to be dif­fi­cult for you to even qual­i­fy for this type of deal,” says Stacey Bum­pus, expert con­trib­u­tor to GoB­ank­ingRates. The site’s inves­ti­ga­tion of sign and dri­ve deals reveals that adver­tised offers rep­re­sent the best prices that are only extend­ed to “well-qual­i­fied buy­ers” – a select few of appli­cants.

Accord­ing to the report, not all buy­ers will qual­i­fy for the quot­ed offer, and many may end up with a high­er month­ly lease pay­ment than they had planned.

Fur­ther­more, poten­tial leasers are often respon­si­ble for tax­es, title and reg­is­tra­tion fees, upon sign­ing. “As with any oth­er cir­cum­stance that requires you to spend your mon­ey, it’s crit­i­cal that you read the fine print on a sign and dri­ve lease,” says Ms. Bum­pus.

As with any oth­er cir­cum­stance that requires you to spend your mon­ey, it’s crit­i­cal that you read the fine print on a sign and dri­ve lease. The first thing you’ll dis­cov­er is that, unless you have an impres­sive cred­it score, it’s going to be dif­fi­cult for you to even qual­i­fy for this type of deal.

Don’t believe it? The next time you find a deal, look for the aster­isk then scroll down to the fine print. Most like­ly, it will read some­thing to the effect of “For well-qual­i­fied buy­ers when financed through XYZ Finan­cial. Not all buy­ers will qual­i­fy.”

This is due to the fact that auto deal­ers aren’t will­ing to bet on a per­son with poor cred­it mak­ing car pay­ments with­out a secu­ri­ty deposit or down pay­ment.

Also, it’s impor­tant to note that most sign and dri­ve deals require tax­es, as well as title and reg­is­tra­tion fees — usu­al­ly at the time of sign­ing. In oth­er words, you’re prob­a­bly not dri­ving away from a deal­er­ship with­out pay­ing a dime.

Anoth­er thing to note is that sign and dri­ve lease deals make up the dif­fer­ence you’re not pay­ing up front in your month­ly pay­ment. For instance, a no-mon­ey-down con­tract could result in $280 in month­ly pay­ments, but if you were to pay $2,600 at lease sign­ing, your month­ly pay­ment could be reduced to $199 per month

For more infor­ma­tion read the full inves­ti­ga­tion report­ed on by Stacey Bum­pus for GoBankingRates.com.

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1 Comment

  • Phil says:

    Sign and dri­ve is exact­ly that. No mon­ey to be paid. You are reward­ed for hav­ing good cred­it. Seek out the good deal, be patient and you can find a great deal. Many deals have the deal­er­ship low­er­ing cap cost to achieve a great lease-how about a Lexus 350 RX with pre­mi­um pack­age for less than $400/month with NO mon­ey out of pock­et and 1st month already paid. Don’t be afraid to lease-these experts are not experts.

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