What is the Best Way to Lease a Car and Land the Best Deal?
Leaning toward leasing your next ride, but your unsure of the best way to lease a car. When it comes to leasing a new vehicle, prepare yourself on how to get the best lease deal, so you can drive with confidence and save as much money as possible. But, getting around the different terms and conditions of leasing a vehicle can be tricky if you’re not familiar with the process.
The best way to lease a car is to know the difference between buying and leasing. Leasing is a great alternative to buying depending on your needs and lifestyle. Especially if you don’t think you can afford payments on a new car, a car lease may be a better option with lower payments than purchasing a vehicle will get you.
If you’re wondering what the best way to lease a car is, then you’ve come to the right place for car leasing tips. Here, we’re discussing what to know when leasing a car to get you off the lot with a fair deal.
7 Tips For The Best Way to Lease a Car
It’s easier to lease a vehicle with good credit and oftentimes you will avoid a hefty down payment.
It’s important to keep in mind that you’ll be paying for the depreciation of the vehicle with a car lease, plus tax and other fees. In addition, there is a requirement to turn the vehicle in at the end of the term.
Know Leasing Terms
The best way to lease a car is to know leasing terms before you start shopping. There are five different elements that you should consider before you negotiate a lease car and sign a contract.
Capitalized Cost – This is the agreed upon price for the vehicle. First, you’ll need to deduct for a down payment and/or trade-in. The remaining amount is what the leasing company will invest in the vehicle.
Residual Value – Your residual value is the vehicle worth at the end of the car lease term. Calculated as a percentage of the original Manufacturer’s Suggested Retail Price to sell the car. Then converted to a dollar amount.
Money Factor – The money factor known as your lease rate, or the lease factor is comparable to the APR, or annual percentage rate with a traditional loan.
Term – Car lease terms are typically no more than 36 months. This is the length of time you will drive the vehicle and make payments.
Mileage Allowance – With a car lease, mileage limitations apply between 12,000 and 15,000 miles per year. If you go over, additional fees apply at the end of your term. These fees are generally anywhere from 10-15 cents per mile.
You can ask your dealer to purchase additional miles before you drive it off the lot. Make sure not to ask for more than you’ll use because you won’t be refunded for the difference.
Lease Buyout – If you decide that you’d like to purchase your leased vehicle, after all, you can opt to buy out the car lease. You can also wait until the end of the car lease term, negotiate the car lease end price and pay the difference in value from what you’ve already put into the residual value.
Choose Cars That Hold Value
The best way to lease a car is to find one that holds its value. You can find many car websites and magazines that publish annual lists of vehicles that are good for leasing with residual values anywhere from 45% to over 70%. Remember, these values are based on the term of your car lease, which is typically three years.
Search for Leasing Specials
Many dealerships and manufacturers will offer special leasing deals on vehicles that aren’t selling. This is the best way to lease a car to find lower monthly payments and oftentimes lower interest rates. When searching for these deals, make sure when you negotiate car lease terms it includes at least 12,000 miles annually and don’t require a high down payment.
Kelly Blue Book is a great source to price out a vehicle that you intend to lease. You should be looking for the invoice price, which is the price that the dealer paid for the car. It likely represents the lowest price available. You may also find cash rebates that could lower the price of the vehicle below invoice.
When asking for quotes, it’s best to contact the dealer online or by phone and ask for the best sales price. Don’t tell them that you intend to lease until after you’ve been quoted with a price such as you intend to purchase the car.
It can be confusing to compare prices from different dealers depending on the different stock options of different vehicles on the different lots. Keep this in mind while you’re shopping around so you can get the best deal on a vehicle that has all the features you’re looking for.
Ask About Lease Payments
Remember that you should have been quoted a sales price. Once you’ve decided on a vehicle, you can ask your dealer about the car lease payments on the price that you were originally quoted. You should look for a 36-month car lease with at least 12,000 miles. And, $1000 in drive-off fees is a good starting point for your negotiations.
Closing the Deal
Make sure the monthly payments fit your budget before you close the deal. You can even close the deal from home and have the dealership deliver the vehicle to you.
Make sure the contract matches your terms and the agreed upon sales price before signing any paperwork. It’s a good idea to close the deal from home if you can in order to avoid the dealer trying to slip in additional fees in financing.
Leasing a new car, truck, or SUV doesn’t have to be confusing. Simply keep this guide in mind when you’re ready to start car lease shopping. You should be better equipped to handle the dealer and walk away with a good deal.
Leasing a vehicle is actually less complicated than buying one if you know what to watch out for. The best way to lease a car is to compare deals across different dealers. And, always ask about the vehicle’s safety standards before driving it off the lot.
You’ll need to pay GAP insurance, which covers the difference in the vehicle’s value if it’s totaled in a collision. And, don’t forget to consider your cost for traditional auto insurance coverage.
If you have additional questions about how to lease a car, feel free to contact us. We are your source for everything credit related.
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