Why You Should Lease From A New Car Dealer
Consumers who are considering leasing a new car or van from someone other than a new car dealer should be wary of claims that they can get great savings, compared to deals offered by new car dealerships, says Gordon C. Wilson, Vice-President and General Manager of a new car dealership in Richmond Hill, Ont.
Mr. Wilson, who is a past President of the Toronto Automobile Dealers Association (TADA), recommends that if you get a quote from an outside leasing company take it to a couple of dealers.
"I am sure they will be able to match any offer from a leasing firm, particularly since leasing firms must first purchase their new cars from a dealer."
"An independent leasing company's purchase price still includes a markup, the amount of which depends on the number of vehicles they buy from a dealer. In most cases, the consumer would benefit from dealing directly with the dealer and eliminate the middle man."
Mr. Wilson says the new car dealer industry is concerned about ads from some leasing firms, which claim to offer savings in the range of up to $2,000 per vehicle or $50 to $60 per month.
"It just isn't so. In fact, the TADA recently compared these so-called claims of huge savings of one major leasing firm, which was advertising on the internet and found that in almost every instance the prices offered by the dealers on every make and model were more competitive than those being advertised by the particular leasing firm."
"While the internet is a useful tool to obtain information, it should not replace the benefits of face-to-face dealings in a showroom environment, where you can get first hand comparisons on the vehicle, its options and price. For example, automotive dealers and their product representatives have the expertise and direct technological hook up to the manufacturers to obtain the latest product features and benefits.
"When it comes to financing, the dealers have access to factory leasing rates, which in many instances is far better that what you can get from bank borrowing rates. Most independent leasing companies do not have the same access to this low-cost financing."
He points out that one of these leasing companies openly admitted in a recent article that "leasing through us is the same as going through a dealer - the mark up is identical."
He says it appears many people are taken in by such comments as "Because we don't have the same overhead costs as dealers, we can save you thousands of dollars. The fact is, dealers are more competitive because they are the source of the vehicle, the leasing companies have to purchase the car from the dealer."
Mr. Wilson also points out that dealers have the facility to provide service and warranties, something the leasing companies have no direct ability to provide. Therefore dealers offer a higher level of comfort to customers who have purchased or leased a vehicle from them."
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