ANDY'S CONSUMER TIP OF THE DAY: sign-and-drive leases

ANDY'S CONSUMER TIP OF THE DAY: sign-and-drive leases

MEMPHIS, TN (WMC) - The ads are all over the TV about 'sign-and-drive' leases. Just sign the dotted line and drive that new car off the lot and pay nothing up-front: no down payment, no deposit.

It's not that simple.

Yes, it's true there's no money down in a sign-and-drive deal. The dealer may even drop your first month's payment. But only if you have good credit.

If you have bad credit, forget it. No dealer's going to lease you a car for zero down or drop your first payment if your credit's awful. Even if you do qualify, taxes, title and registration fees are up-front, so you will not sign-and-drive without paying something up-front.

A sign-and-drive lease is not easily transferable to another lessee before the term's up, either. Scot Hall, vice president of operations for, used Volkswagen's sign-and-lease offer as an example. "Volkswagen credit retains the right to go back to (the original) lessee should the person taking over that lease not make payments (or) refuse to pay a mileage penalty or other end-of-term fee that might be due," he said.

That means you better plan on driving that car for the entire term. No less...and no more, either, since you'll get hit with mileage penalties or possibly lose warranty protections if you drive beyond the term.

The bottom line is sign-and-drive's great only if you have good credit. You really ought to consider some sort of down payment so you can lower your monthly payment as much as possible. Also, even thought it's sign-and-drive, you can still try to negotiate the advertised monthly payment.

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