Companies Launch Car Incentives to Replace Leases

Several companies are launching financial car incentives to compensate the loss of leasing as a viable sales tool.

The moves come after all three Detroit auto makers changed their leasing programs in recent days. According to Bloomberg News Chrysler has stopped offering leases through its Chrysler Financial unit, while General Motors, Ford Motor Co. and BMW announced plans to tighten the availability of leasing.

According to the Saint Louis Post Dispatch Chrysler on Friday announced several finance deals "to make buying as affordable as renting," the automaker said in a statement. The deals include 72-month financing on a wider range of vehicles and $2,000 cash-back on certain purchases financed by Chrysler Financial.

And CNN reported that Chrysler not only has extended discounted six-year financing to more products, but is offering $750 to lease customers that can be used toward the purchase of a new vehicle. The company is also offering 40 percent off select Dodge Ram pickups as part of its August incentive program for dealers and BMW several weeks ago began offering buyers 0.9 percent loans of as long as five years Bloomberg News reported.

GM meanwhile is offering its customers $1,000 off various V-6-powered versions of the Chevrolet Malibu sedan and the Pontiac G8 sedan that hit showrooms this spring. According to Dow Jones Newswires the auto maker will continue to offer six years of free financing on its large SUVs and up to $8,000 off a GMC Envoy or Chevy Trailblazer.

Buyers also can get a deal on the Corvette sports car, up to 48 months free financing. Even though GM has offered zero-interest loans on the iconic Chevy before, the company’s never done it for such a long time.

So even though leasing is getting tighter or eliminated not everything is looking bleak for those looking to purchase a new car, just try to find the incentives that best adjust to your budget before heading to the dealership.

New Car Leasing: What Exactly Does "Excess Wear And Tear" Mean?

When it comes to new car leasing, most of us know that you'll be charged for "excess wear and tear." But what exactly does it mean? What is considered to be "normal wear and tear" in the new car you lease? It depends on each car leasing company. However, the lessor's standard for "excess" should be specified in the car leasing agreement, so read carefully to find out how to avoid paying for it. If the definition is very vague, you may not want to sign that lease.

To avoid excess wear and tear charges, follow the regular maintenance schedule for your auto, fix problems as they occur, and keep the vehicle interior clean. Some lessors allow you to have the vehicle inspected for "excess wear and tear" prior to the scheduled termination date. We advise you to make use of this procedure because it gives you notice of any expected excess wear charges and you'll have the opportunity to repair the car before it is returned. Keep in mind that your automobile insurance company may cover some of these repairs.

Also remember that according to the Consumer Leasing Act, lease agreements have to disclose to the lessee the terms under which the lease is being done, including "excess wear and tear." Many states also have laws now that protect consumers from excess wear and tear charges. But always double check all the terms of your lease before signing and make sure you understand exactly what you're paying for.

Read more in "Avoid Extra Car Leasing Charges."

New Car Leasing: Beware Of Mileage Limits

Most people drive between 12,000 and 15,000 miles per year. This figure is especially relevant when it comes to new car leasing because most leases are closed-end and have mileage limits.  If you exceed the limit, you'll have to pay for each mile at the end of the lease term. So some leases appear to be great deals with very low monthly payments - until you take a look at the mileage limit and realize it's incredibly low.

The Buying Advice Team advises you to always make sure you know the mileage limit on a lease you agree to and make sure you won't go over it. If you think the limit is too low, it may be worth it to pay a higher monthly payment and have a higher mileage limit.

You may also buy more miles upfront, which is cheaper than paying for the excess miles once the lease is over. Read your lease to find out how much you will have to pay for each mile you drive over the limit. If you buy extra miles and don't use them, some car leasing companies will refund your money, but the new car lease must state this, so check for this provision before signing.

Read more in "The Association of Consumer Vehicle Lessors."

Auto Leasing: Closed-end vs. Open-end Leases

Auto leasing can be a complex topic and you should understand every aspect of  it before signing a contract. The difference between an open-end and a closed-end lease is one of those aspects you should be familiar with.

Closed-end Lease
The car's residual value is pre-determined in the leasing contract. Your financial obligations are unaffected by what the vehicle is actually worth when the lease ends. You assume no risk for the depreciation of the car.

Open-end Lease
The residual value is still set at the beginning of the auto lease. However, if the car is worth less than the residual value when the lease ends, you must pay the difference to the car leasing company. You assume the risk for depreciation.

We suggest you not accept an open-end lease. However, if you do, the Consumer Leasing Act provides consumers with some protections against unreasonable end-of-term charges in open-end car leases.

For more information you can read the "Consumer Handbook To Credit Protection Laws" of the Federal reserve Board.

New Car Leases From Honda Are Hydrogen

Honda recently announced that it will be ready to start production of new car leases and sales of its hydrogen powered FCX within the next two years.  In a press event recently held in California, Honda allowed many journalists the opportunity to test drive the new FCX.  The general consensus was that the vehicle was fun to drive and had an impressive sport performance.

Honda has plans to begin leasing the FCX in California within the next two years for around $600/month.  The biggest hurdle to this new hydrogen technology is the current lack of fueling stations.  California currently has the best developing hydrogen fuel-station infrastructure so it is natural that Honda would choose it as a test ground for its new hydrogen car.

Get $1,000 For Your Auto Lease

Daimler-Chrysler is offering 1,000 bucks to any one who currently has a lease on a Toyota Camry, Honda Accord, Nissan Altima or Ford Fusion and who will trade in for a 2007 Chrysler Sebring.  This new car discount is meant to attract drivers away from the other car brands and to the Sebring.

It has been a rough few months for Daimler-Chrysler and they could really use some renewed interest in their Sebring sedan. Hopefully American consumers will view this action as a simple promotion for their newly designed car and not as simply an attempt to move vehicles.

Read more in "Chrysler: $1,000 For Your Sedan."

Lease Vs Buy New Car: What's Right For You

Lease vs buying a new car. How do you know which option is right for you? Which will put you in the car that you desire for a price that is reasonable? Before you decide whether you should consider car leasing or buying ask yourself the following questions.

I like to drive newer car models. Driving 10,000 miles in one year is a lot for me. My car is serviced regularly. I need low monthly payments. Keeping my monthly installment low matters more to me than how much interest I pay. I don't have any savings for a down payment. My car makes an important statement about me. As long as I like the place I live, I'm happy renting or owning it. A car is just transportation from point A to point B. I do a lot of highway driving. I take my car into the shop for major problems only. I could increase my current payments if needed. Paying as little interest as possible is a high priority. I plan to make a large down payment. The way to get value out of a car is to drive it into the ground. Paying rent is throwing money away: You don't have anything to show for it.

If you answered the majority of the first 8 questions with "yes" then you may want to consider leasing. If you answered the majority of the last 8 with "yes" then buying may be right for you.

Read more in "Should You Buy Or Lease A Car."

Things To Know When Considering Vehicle Leasing

If you're considering vehicle leasing instead of buying, there are certain things you should know. First, there are two types of automobile leasing: closed-end leases and open-end leases. Unless you violate a lease agreement, a closed-end lease protects you more than an open-end lease. In a nut shell, it doesn't require additional payments at the end of the lease term.

Alternatively, an open-lease agreement does require you to pay the difference in a vehicle's fair market value and residual value once you are at the end of your term. We recommend that you opt for the closed-end lease.

Be aware that you will need to make a down payment on your leased vehicle. Also, a security deposit is required, but this should be refunded at the end of your lease unless you have violated any terms of the agreement.

To learn more read AOL Money & Finance's "Paying For A Vehicle: Types Of Leases."

If You're Going To Lease Consider This

Automobile leasing is great for some people and not so much for others. If you think you would like to lease a vehicle then you have to hear what we have to say:

Is there a chance you will want to end your lease early? A lease term of 24 to 36 months is the average lease period. If you don't want to keep a car that long then ending your lease early will cost you more. Will you typically drive more than 15,000 miles a year? Most lease agreements limit you to between 10,000 and 15,000 miles per year. Going over that limit will cost you by the mile ... Pricey!! Will you maintain the leased car in good condition? Any damage due to poor maintenance or rough driving will come out of your pocket.

To learn more about car leasing read Buying Advice's "Secrets To Receiving The Best Car Lease Deal."

Car Leasing Leaps Back

Cut rate car leases are cutting into the new car market. Rising interest rates seem to be putting a damper on new car sales as well. The advantage that leases have at this time is the fact that automakers have their own loan companies. These companies can shave points and make leases look more appealing than an outright purchase.

A J.D. Power and Associates study indicates that auto leases are at a four-year peak, making up 21% of new car retail business. Higher and climbing gas costs may also be contributing to the decrease in car sales. In the last year an auto dealer who was selling 300 vehicles a month is now turning over only 75 cars a month.