So you are sitting in your car and your dealer calls asking if you want to go ahead with a pull-ahead car lease deal. And suddenly you are confused what this ‘pull-ahead’ deal is? Is it something that the manufacturer is offering or just a dealer gimmick? What about my remaining payments and whether or not this is legitimate?
Over the past few years, these programs have gained popularity among automakers and dealers alike. But what makes a ‘pull-ahead’ program so attractive for so many people? We will be addressing all these and other related questions about ‘pull-ahead’ car lease programs on today’s blog.
Defining Pull-Ahead Lease: The term, pull-ahead lease, refers to an offer by a car dealer or car company to allow a car lease to be ended early, as part of a deal to buy or lease a new car. Typically, the deal pays off the final few lease payments on the old vehicle, while offering special incentives on a new vehicle.
In other words, this program allows you to get out of your current leased vehicle and into a new one without some of the costs associated with terminating your lease early.
Obviously, it is not as easy as it seems, there are some financial and structural lacunae that you must know before pulling off such a deal.
Consumers who want to take advantage of a pull-ahead lease program should take a bit of caution and know these facts:
- First, while it may seem that having your final few payments made for you is a good deal, make sure those payments haven’t been added back into the deal in the form of a higher price on the new vehicle. At best, the value of those payments may simply be the discount that you would have gotten on the new car anyway. In other words, the “special” deal may not be so special at all.
- Second, although the dealer may make it sound like he’s taking your vehicle as trade (he’s buying it from the lease company to sell on his used car lot), this may not be the case. In fact, he may be simply returning it to the lease company on your behalf, although a little early. This means you may be billed later if there was excessive wear-and-tear or mileage. At worst, you could be billed for the final few payments that the dealer failed to pay.
- Finally, make sure you don’t have trade equity in the vehicle you’re trading. Calculate and check the trade-in market value and compare that value to the lease-end purchase option price in your lease contract. If the value is significantly higher, you have trade value that can be used as credit toward the purchase or lease of the new vehicle.
Presently, if you are running a leased car then you must’ve come across a fair number of ads or emails suggesting that you trade in your current car for a new one.
These pitches would often promise a new car for similar or lower lease payments. They may also say that the dealership wants your car because it’s low on used-car inventory and matches everything they are looking for. Even if you’ve hardly had your new leased car, new enough to need a second oil change, it may still not matter because the time to trade up is now.
These offers always sound attractive, and the sheer number of attempts to reach you can add a sense of urgency. But are there any catches? Are these offers real? For now, its answer depends on the type of advertisement you’ve received and who sent it.
But these programs are not available all the time. These deals are available only a couple of times a year for a brief time. Usually, the lease programs target those who are in their final three months of lease agreements.
Why are you receiving the offers?
This must have bothered you especially when you just had a new car. In the car industry, these ads and offers are part of “pull-ahead” programs. Their aim is to “pull” the customers back into the buying cycle ahead of their scheduled time, which would usually be at the tail end of their three-year lease.
You may find three-year period a relatively short time. But in the eyes of carmakers and dealerships, waiting three years for a customer to come back and do business again seems like a lifetime. So instead of waiting until your lease is over and to seduce you with offers of a new car, these pull-ahead communications will start targeting you well before your lease matures. Some of these offers might even hit your inbox before your lease is at the halfway point.
These programs don’t just focus on making a new deal, though. For some automakers, these programs are used to spread out the lease returns of certain models so that a large number of the same cars aren’t returning to the auction blocks at the same time. It is obvious that too many of the same car models showing up simultaneously at auction will eventually drive down that car’s value in the market.
Finally, there is a possibility that the used-car department of your local dealership may truly be interested in your used car, especially if there is a shortage of clean, late-model cars available.
So if you can be convinced to turn in your car early than your lease period, it can be a triple win for the dealership and automaker.
With so much at stake, it must now be clearer for you to understand why carmakers and car dealerships invest so much energy in securing you back in the dealership ahead of schedule.
What are the types of Pull-Ahead Car Lease Programs?
There are two types of pull-ahead programs:
- Car manufacturer Pull-Ahead car lease are those programs that come from the people who made your car.
- Car Dealer Pull-Ahead car lease are those that come from the people who sold it to you.
The offers and advertisements from the carmaker have usually well-defined benefits. Some automakers make it extremely attractive to keep you in their brand, or at least strongly consider it. Some of the deals would offer to waive your last few car payments if you get into a new car now. Other offers may waive off excess miles or disposition or damage charges on top of giving you a sweet deal on your next new car. So when you get a pull-ahead offer from a carmaker, you know what to expect.
Pull-ahead programs from dealerships are a little harder to decipher. Offers with phrases like “little or no money out of pocket” or “payments as low as” make it difficult to determine what exactly they’re offering other than the prospect of a good deal on a new car.
This does not mean that dealership offers are all smoke and mirrors. Because of the behind-the-scenes work of predictive algorithms within dealerships, these offers generally have a targeted audience whose vehicles put them in a position to finish a lease early and enter into a new car deal.
It’s an imperfect science, though. The dealer can’t guarantee that you’ll be able to get out of your car for no money out of pocket and into another car for the same or lower payment. Hence the vague language. So if you get one of these offers, however, just know that a deal is possible.
How to determine a Good Pull-Ahead Deal?
If you’re tempted by the offer you’ve received but don’t want to take a trip to the dealership for nothing, here are a few guidelines to help you figure out before time if your chances are good, bad or nonexistent:
- Before you enter into the new deal, read the offer carefully so you understand all the terms, conditions and possible fees.
- Decide rationally that you actually want to lease again. If ownership is your goal, a pull-ahead offer may not be the right option for you.
- Find out how much time is remaining on your current lease.
- Discuss with your car dealer any incentives and rebates for factory-backed lease specials that might set you up for a good deal.
- Inquire about your lease payoff amount from your bank.
- Calculate and compare the payoff amount to your car’s value.
- Make sure the new deal is well within your budget. Do not overbuy, do your best to stick to your budget.
By now you must be aware that all pull-ahead car lease programs are designed to create new business for dealers and automakers and that they may not always be good deals for customers. So if you’ve done your due diligence and the deal pencils out, there’s nothing wrong with leaving one lease early — especially if you’re able to lower your payment, get some extra options you didn’t have before, or both.
But there can be another way if the dealer or the automaker deals do not sound better. If you have a car in sound condition, then you can transfer your lease to earn better than the two. You can put your car lease for transfer at QuitALease and make a good deal. Transferring your lease is better than any other lease quitting option. You have the freedom to negotiate and its an open market where you can get maximum value of your lease agreement.