One of the "hidden" fees about financing a car is that the dealers can increase your interest rate by adding an amount even when you have a good credit score. This is called the "dealer reserve". For example, if the interest rate from the finance company is 6.0%, the dealer will add up something like 2.0% and the total interest rate would go up to 8.0%. This hike in interest rate is not mentioned anywhere in the document you sign. This is just an additional profit for the dealers. You can negotiate the added interest rate but not the base rate.
You may not be able to negotiate the lease rate as the interest rate is expressed as "money factor" and you won’t find the rate factor in your lease contract.
Get financing yourself
There are many ways by which you can arrange finance all by yourself rather than going with the finance provided by the dealer. Here are some points for self financing:
• You can go for personal contract purchase. With this option you need to pay a deposit on the car and then pay monthly repayments over a fixed period of time and at the end of the loan you can pay the major amount left owing on the car or give back the car.
• You can also go for credit financing that allows you to be the owner by paying the money left on the car at the end of the agreement.