Car Leasing Case Study

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Introduction
It all starts when I was watching the ad on TV for the car I always dreamed of, a BMW 528 x drive. The offer was so attractive given that the monthly payments shown were actually within my budget. Though the ad mentioned leasing not selling, therefor I need to know: what is car leasing? How the process works? How it is different than buying? Should I lease or buy my next car? How should I prepare for the lease? What is the deal I am looking for? How to negotiate a good deal? What are the after deal obligations? What are my lease end term options? And what happen if I decided to end the contract before the end of the lease term?
As in any other negotiation, I should take enough time to prepare properly before making any decisions that I might regret in the future.
What is car leasing?
Leasing is paying for the use of a car over a specified period of time, in other words it is a term of financing a car. In leasing a car, it is important to note that the total price of the car is important (even if I am only responsible for part of it) and it can be negotiated with the dealership; the owner of the car is the leasing company not the dealership, the dealership acts as an agent for the leasing company and when the deal is generated I will be dealing directly with the leasing company; I agree to make regular monthly payments for the specified period, maintain the car, pay the car insurance, local taxes and tags fees, and I am expected to stick with the mileage indicated to the end of the lease term.
I will be hold accountable for any damages or extra mileage above the specified limits.
Also, in a lease the monthly payments are upfront, not like when you buy the car where you pay at the end of the month. This means that i...

... middle of paper ...

...the above and make sure that I will be having a good deal.
I will be reminded a month a head of the lease term on the date of returning the car and if I am exploring other options I need to decide within that period.
It is not a coincidence to note that “forced arbitration clauses are included in nearly all car sale contracts and leases. Franchise laws in all 50 states give automobile dealers a special monopoly over new car sales, allowing them power to decide what they want to include in their sale/lease contracts. Consequently, consumers purchasing or leasing a new vehicle are a captive audience with no choice but to enter into the sales/lease contract put before them parties when they cannot be resolved on their own to Arbitration”.( retrieved from http://www.fairarbitrationnow.org)
(Please see exhibit 3: Sample of Vehicle Purchase/Finance Arbitration Agreement)

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