Independent Car Lease Companies

Your Alternative to Conventional Dealer Lease Financing

First of all, let's make sure we understand that dealers don't finance car loans or leases.

When a customer agrees to buy or lease a car, the dealer must attempt to "place" or "assign" the loan or lease with a bank, finance company, or lease company. The finance company then pays the dealer for the car, and works out payment details with the customer.

Two Ways to Lease

When leasing, you have two possible methods by which you can source the financing of your lease. Choosing the right source can reduce your monthly payments and save you considerable money over the life of your lease.

First, you can finance through a dealer's "captive" finance source, which is usually the car maker's own financial company, such as Ford Motor Credit, General Motors Acceptance Corporation (GMAC), or American Honda Finance Corporation.

Some dealers use alternative sources such as a distributor-associated financial company, or a major national bank such as Chase Manhattan or Wells Fargo. Normally, a dealer will not offer you choices but will select the source that offers him the best deal — which is not always the best deal for you.

Second, you can find your own sources of lease financing, which is typically through an independent lease company, such as LeaseCompare. Independent lease companies can often, but not always, provide better deals than dealer "captive" companies. Furthermore, they are much more personal and "customer centric."

Independents are not tied to a single manufacturer or financing source, which means they can better match a customer's needs to the right vehicle and the right lease terms. Because they can work with dealers anywhere in the country and get fleet pricing, they can typically find your car, arrange the lease deal, and have your car delivered to you. Many leasing customers like dealing with one company for all their leasing, even for different vehicle makes and models.

Dealer or Independent Lease Company? Which is Best?

Independent lease companies, such as Primelease and LeaseCompare, are much more flexible than new-car dealers.

If you need a lower residual value because you know you want to buy your car at lease-end, or you want a higher residual for lower payments — or you want an open-end lease for your business needs, independent lease companies have this kind of flexibility. Dealers' finance companies do not.

Most independent lease companies will also handle pre-owned vehicle leases, up to 3 or 4 years old. Most dealers do not.

Here's want one reader said about her experience with an independent lease company:

"I used your Lease Guide to check out deals and do research on the car I wanted to lease. I also found and contacted PrimeLease.com as a outside lease company by using your site. Using the invaluable information on your site and the help of PrimeLease I was able to save $1000 on total price and $60 dollars a month in payments. I will refer your site and PrimeLease to all my family and friends!"

S. Kuberry

Independent lease companies can give unbiased and professional advice on vehicle selection regardless of make and model. Dealers must sell what they have.

Independent lease companies such as Primelease generally compete well with dealers on high-end and luxury vehicles with better money rates and higher residuals. Customers who lease high-end vehicles generally prefer a no-nonsense, professional business transaction, usually handled completely on the phone or by email, rather that being subjected to time-wasting sales tactics in a dealer showroom. Independent lease companies know this.

Dealers can generally provide better lease deals on "commodity" cars that have lower residuals and frequent manufacturer incentives. When a car manufacturer is willing to lose money by subsidizing lease money factors and residuals on limited-time promotions to help move slow-selling vehicles, their deals are hard to beat.

Dealers are "sales centric" not "customer centric." If you prefer a professional, but personal, relationship with a company who you can trust to look out for your needs, you'll do well with an independent leasing company. An independent leasing company's most valuable asset is its customers, not millions of dollars worth of cars on a parking lot.

How to Work with Independent Lease Companies

If you know the vehicle you want, simply contact the lease company and ask for a quote, which is free. With LeaseCompare, you can get your quote online, right on your screen.

Although the initial contact can be made by way of the Internet, through an information form or by email, it is best to conduct the remainder of your transaction by telephone, which the lease company will probably initiate. It's more personal and you'll feel more comfortable that your needs are being understood and met.

Regardless of where you get your lease financing, from a dealer or independent lease company, you still have to understand how leasing works, and you still have to be able to determine if you are getting a good deal. Our Lease Kit can help.

For more, see LeaseGuide.com