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TO LEASE OR NOT TO LEASE?

More and more vehicle owners are considering leasing versus the conventional method of financing. But is leasing for everyone and is it really beneficial?

With traditional financing, you purchase a car or truck, make a down payment and agree to pay for the vehicle over the life of the finance contract - plus any interest on the loan. These loan agreements usually range between four and five years. With leasing, you pay only the portion of the vehicle's worth that you anticipate using - over the term of the lease - plus any lease charges.

Leasing programs definitely provide affordable options and flexible terms to achieve higher customer satisfaction. They may offer numerous benefits for a lot less than one can expect.

Here are some features and benefits offered by leasing programs:

1. Lower monthly payments: Because you pay only for a portion of the vehicle's total value, lease payments are lower than conventional finance payments over identical terms; these lower payments usually enable the customer to select an upgraded vehicle with more features and options.
2. Mileage flexibility: customers may select the approximate mileage they will require during the term of their lease.
3. Lease term flexibility: customers may opt for a 2, 3 or 4 year lease term.
4. Gap protection: If your vehicle is stolen or damaged beyond repair during the term of your lease, some lease programs will waive the difference - or gap - between your insurance payoff amount and the lease payoff.
5. Tax advantage: In most provinces, there are tax advantages of having a lease versus conventional financing. With financing, you must pay the G.S.T. and provincial sales tax on the total cost of the vehicle when the purchase is made. This can cost thousands of dollars. With a lease, you only pay the tax as the monthly payments become due. Also, if a vehicle is to be used for business, there could be additional tax deductions available.
6. Additional protection: some leasing programs offer products that cover excess wear and tear charges or drop off options for seniors should the client pass away during the lease.
7. Payment options: payments can be tailored to the customer's needs based on amount of down payment (if any), term of the lease, mileage requirements and specific model chosen.
8. New and used vehicles: Leasing programs are available on both new and used vehicles.
9. Lease end options: The customer has many options at the end of the lease; he/she may return the vehicle and lease a new one, purchase the vehicle at a predetermined price or simply return the vehicle and walk away.
10. Down payment flexibility: Usually, there is no down payment required; however, the customer may elect to have a down payment to reduce the monthly payment. The customer may trade in a vehicle in lieu of a down payment.
11. Different models: Customers may elect a short-term lease and have the flexibility of changing vehicle models on a more frequent basis.

There are many other benefits to leasing and each manufacturer offers its own leasring program. Make sure that you know what the terms of the contract are; feel free to ask all the questions you may have. Leasing may o may not be for you, but by knowing more about it, you can determine if it meets your personal requirements.

HOW TO MAKE THE RIGHT DECISION WHEN IT COMES TO THE DIFFERENT FINANCING ALTERNATIVES AND MARKETING PROGRAMS?

When customers are shopping for a new vehicle, it is important that the incentive programs offered by the manufacturers are explained in a clear and concise manner. The financing options should all be presented to ensure the customer is provided the appropriate information to make the right decision. Manufacturers may offer different financing alternatives:

• Retail purchase contract with long-term financing that may vary between 36, 48, 60 or 72 months, with varying rates of interest
• Lease contract with terms ranging from 24 to 48 months and interest rates as well as different mileage options (20,000 or 25,000 kms per year)
• Manufacturer's cash backs or credits, which represent a fixed dollar amount that can be deducted from the selling price in lieu of special financing or deducted from the selling price after the taxes are added.

When choosing the appropriate financing alternatives, customers should consider the following factors:

• Monthly budget allocated to a vehicle acquisition: how much can I afford to pay for a vehicle on a monthly basis?
• Down payment: does the customer have the financial flexibility to contribute a down payment?
• What are the customer's driving habits: how many kilometers will be driven on a yearly basis?
• What is the customer's trade-in cycle: how long does she/he keep the vehicle for?
• What is the best financial option: should he/she choose the low interest (or no interest) loan or the manufacturer's cash back offer?

When purchasing or leasing a vehicle, the customer should ask the appropriate questions and rely on the information provided by the sales representative and Finance Managers. Dealership staff should have the skills to provide the appropriate information, therefore ensuring a sales experience that is pleasant and non-pressured.

SHOULD I PURCHASE AN EXTENDED WARRANTY PLAN?

Before a customer makes that decision, she/he should consider the following questions:

• Do I plan to keep my vehicle beyond the New Vehicle Basic Warranty period?
• Can I be without a replacement vehicle while my vehicle is in for repairs?
• Do I value the benefits and security of emergency Roadside Assistance?
• Do I drive a lot of kilometers…. or will I keep my vehicle longer that 3 years?
• Can I afford unexpected repair bills?

An extended warranty plan protects the customer against the cost of unexpected repair bills by covering many key vehicle components, after the basic warranty has expired

Here are some additional benefits:

• Peace of mind
• Wide range of deductible options
• Roadside Assistance
• Rental Car Reimbursement
• Backed by Ford and over 5,000 dealers in Canada and the United States
• Transferable
• Financing available
• Time and distance choices that are flexible and right for the customer
• Different options in term of covered components (from 29 to 500+)

IS IT THAT IMPORTANT THAT I PERFORM THE REQUIRED MAINTENANCE ON MY VEHICLE?

One of the keys to enjoying a safe, reliable and dependable vehicle is ensuring that the company's required maintenance is performed in accordance with the schedule maintenance guide that is provided at time of delivery. Scheduled maintenance helps ensure the proper operation, safety and performance of your vehicle, while the benefits to you are substantial:

• Helps reduce the risk of unwanted breakdown and costly repairs
• Helps maximize the resale value
• Helps save on fuel and is better for the environment

It is the customer's responsibility to ensure all the required maintenances are properly performed and the materials used meet the manufacturer's specifications, as the failure to perform maintenance as specified in the Owner Information Guide will invalidate warranty coverage on parts affected by improper maintenance. So, the best place for your vehicle's maintenance is at the selling dealership, because they have the people who know your vehicle best. They have the quality parts and quality service, a winning combination of great value.

SHOULD I PURCHASE A USED VEHICLE PRIVATELY OR FROM A REGISTERED DEALER?

Some consumer groups believe that the better alternative to buying privately is to buy from a registered dealer. There are many reasons why buying from a registered dealer is safer for consumers.

Only dealers offer these services:

• A Dealer's Warranty
• After Sale Service
• Choice of Vehicles
• Recourse
• Title Guarantee Against Stolen Vehicles
• Financial Assistance
• Extended Warranties
• Lien Free Vehicles
• Trade-Ins
• A Dealer's Compensation Fund for Consumers' Protection

When consumers buy a vehicle from a registered dealer, they are protected by numerous pieces of legislation, such as the Sale of Goods Act, the Consumer Protection Act, and the Business Practices Act, to name a few.

By law, dealers must guarantee title against stolen vehicles. Also, dealers must guarantee that there are no liens on the vehicle. They must use Bills of Sale that conform to the law, and are required to report all known material facts about the vehicle.

In the event of a dispute, consumers can seek help from industry associations, such as the UCDA, for impartial mediation, at no cost. If all else fails, the consumer can lodge a complaint with the Ministry of Consumer and Commercial Relations. Ultimately, the consumer can turn to the Motor Vehicle Dealers Compensation Fund, if they have a proven claim against a motor vehicle dealer arising from the purchase of a vehicle.

Additionally, dealers can provide warranties and after sale service. Consumers are offered a selection of vehicles at a dealership, ensuring they get the vehicle that is fit for their purposes. Dealers are able to take a customer's vehicle in on trade. This makes it less of a hassle to find a buyer for the vehicle and reduces the amount of taxes to be paid.
Dealers also have access to financing programs, making it much easier for the consumer to obtain credit.

All of these factors make the advantages of buying a vehicle from registered dealers clear.

WHEN YOU BUY A USED CAR FROM A DEALER, DO YOU REALLY PAY MORE THAN YOU WOULD IF YOU BOUGHT IT PRIVATELY?

There are two important considerations, when buying a car or anything else. QUALITY & PRICE!

Consider the quality: Buying privately is simply buying "as is". When you purchase privately, you're buying a car exactly as you see it… any problems the car has become your problems. When someone's about to sell their car, it's usually because they're buying another one. That raises the question… why?

Does it need extensive repairs? Has it been giving the owner frequent problems? If so, there's little likelihood that they'd spend the money to have it fixed… and then sell it. That doesn't mean that you can't get a good deal when you buy privately. There's certainly a chance that the car has been well maintained.

Why consider a dealer then? What does a dealer offer you, if he purchases that same vehicle from the customer and then sells it to you? First of all, he's going to have the vehicle thoroughly inspected and refurbish it both mechanically and, in the case of stains, rust, etc., appearance wise as well. It may need a complete repaint, if it's an older vehicle, or it might just nee a quality touch-up.

That's usually the largest part of the difference in cost between buying privately and buying from a dealer. The cost of refurbishing the vehicle, preparing it for sale and ensuring that you, the customer, will be satisfied with it. Most importantly, when the dealer sells you the vehicle it's his responsibility to ensure that it's reasonably fit for your use.

What about price? It's true that dealers expect to make a profit on their sale… if not, they'd soon go out of business, wouldn't they? But what about the private sale? How does the private seller determine the price they want for their car?

More often than not, they check to see what dealers are charging for a comparable vehicle and try to get as close to that price as possible. Often times they might even ask for more because, they may claim, they looked after the vehicle with Tender, Loving Care.
The TLC may be true or it may not! Only a good mechanical inspection will determine that.

Everyone wants to try to get the best advantage they can. The private seller isn't selling the car to become your best friend. In fact, you'll probably never hear from the person again. You're certainly not likely to buy another car from them, so they really have no incentive to ensure that you're a happy customer. That's not true of the dealer. He not only wants you as a happy purchaser of that car; he also wants you to spread the word to your friends and relatives that he's a dealer that you're pleased with. Nothing beats a referral from a satisfied customer.

To sell or not to sell… as is!

Many people who try to sell their vehicle privately soon learn that potential buyers can be very choosy. And why not? If the seller gets a number of turndowns by possible buyers, they may soon learn that selling a car "as is" is not as easy as they thought. Buyers look for reliable transportation and an "as is" car probably isn't!

Is it cheaper buying privately? In the final analysis, it might even be more expensive. A dealer's cost to repair a transmission, replace an air conditioning compressor or repaint a car will be well below what the average person will pay. This allows a dealer to refurbish a vehicle, make a profit and still be competitive with a private seller. Finally, the "good deal" may not be so good. The Ministry of Transportation requires that provincial sales tax be paid on the average wholesale value, or the actual purchase price, whichever is higher. This could eat up any perceived savings.