How To Get The Best Deal On A New Car Lease
Since you are reading this, I am going to assume that you are looking into the lease options for your next new car instead of purchase options. A new car lease MAY be a good deal for you but it is something that you should examine very carefully, since you may end up in a much worse position.
On the up side, a new car lease is almost certainly going to have lower monthly payments that a purchase, compared with the same amount of money out of pocket at the time of signing. You can usually get a good deal on a car lease for less than a couple thousand out of pocket. The monthly payment is going to be determined by what the estimated resale value of the car will be at the end of the lease. So a car with poor resale value is going to have higher monthly payments than a car with a much better average resale value.
But on the down side, you are still responsible for the maintenance of your leased car – gas, oil changes, tires, tune-ups, insurance, and all the other things that normally accompany car ownership, but you are NOT building any equity in the car. In other words, you are in effect RENTING the car, except that you also have the responsibility for the maintenance of it.
Not all new car leases are created equally. You should definitely do your homework as far as what leasing programs are available, what they include and exclude, and most of all, what is it going to cost you. One big thing in almost all car leases is a mileage cap, where a typically mileage cap says that you will put no more than 12,000 miles a year on the car. So at the end of a three year lease, you can have no more
than 36,000 miles on the car. You do not get any extra brownie points if there are fewer miles on it, but if there are MORE miles than that on it, you will pay through the nose for it, something like 30 cents per mile. So in this example, at the end of the lease you have 40,000 miles on it, it is going to cost you an additional $1200 to turn in the car. Ouch!
Over the course of a lease, you may want to terminate the lease early. If this might even be a remote possibility, know what your options are up front. In most cases, there is an early termination fee. Sometimes if you leased your car from a large dealership, they will allow an early termination fee without penalty if you are within about 6 months of the end of the lease, but only if you sign another agreement on another new car lease.
I would strongly encourage you to do a fair amount of homework before you sign on the dotted line. Even if the lease being offered by the dealership on your new car lease appears to be incredibly good, you can almost always be assured that there is a better program available. Sometimes the payments might be the same, but other programs may allow a higher mileage cap, might have lower or no early termination fees, and a variety of other subtle differences that could make a huge difference to you and your intended use of the new car.
Jon is a computer engineer who maintains web sites on a variety of topics based on his knowledge and experience.