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Bankrate's 2007 New Car Guide
Dollar$ & $en$e
Status and styling aside, many car-buying decisions boil down to bucks and budgets.
Dollar$ & $en$e
Select a conversation:
Old Philosopher (salesman):
"Welcome to Go Motors. This beauty is a work of art, isn't it?"
  [And you DO expect to pay for fine art, don't you?]
Miser (customer):
"And how! But it's too rich for my blood. I'm on a fixed income."
  [Man, I'd look 10 years younger in this baby!]
Old Philosopher:
"All the more reason to make it happen. Seize the day, my friend. The two saddest words in the English language are 'what if.'"
  [Why, it's practically your patriotic duty to buy this car!]
"I guess I might consider a lease if I could afford the payments. I drive across the state every weekend to see my grandkids. They'd sure think I was sporty in this."
  [I'll be a babe magnet at the early bird!]
Old Philosopher:
"I'm sure we can keep those payments within your budget. We'll just extend the lease term to 72 months, give you the zero-percent financing instead of the cash rebate and dial back the annual mileage to 10,000. So how does it feel to be a luxury car owner?"
  [Say hello to my little friend, the "full-pop lease."]
"As long as I don't have to break into my nest egg, I'd say it feels great!"
  [I wonder if it will blow my wig off?]
Where she went wrong:
Poor Ms. Miser. For starters, she focused solely on her monthly payments and didn't negotiate a lower sales price. As a result, she could wind up with a "full-pop lease" based on 110 percent of the dealer's sticker price, the highest most banks will allow.
Extending the lease term is a technique dealers use to lower the monthly lease payment at your expense (in interest). And that zero-percent financing? It's almost always to your advantage financially to take the cash rebate instead.
Finally, if Ms. Miser is trekking across the state on a weekly basis, she's going to burn through well more than 10,000 miles a year and will pay dearly for them (on average between 10 cents and 20 cents per mile) in overage at the end of her lease.

By Jay MacDonald -- Posted: Aug. 2, 2007

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