Making Sense of New Car Leasing

Making Sense of New Car Leasing

Making Sense of New Car Leasing

If you're looking to get a great deal on a new car, leasing could be a great option for you. In order to determine whether to lease or buy it's important to carefully examine a few key factors. Make sense of leasing and get a great deal on your next new vehicle.

Start by shopping for new vehicles with high residual values. Residual value is the percentage of value a vehicle holds onto once it's used. When leasing you pay for the amount the vehicle depreciates over the lease term. The higher percentage of residual value a vehicle retains the smaller percentage you'll pay to lease.

Shop lease terms between 24 and 36 months. There are two reasons for this; first, the shorter the lease term the less interest you'll pay. Second, vehicles begin to depreciate more rapidly the older they get, meaning less residual value.

Make sure lease mileage limits meet your needs. Most leases limit you to under 20,000 miles per year. If you drive more than the limit you could end up paying a hefty per mile fee. You can increase mileage limits at an additional cost, but if you're planning to drive much more, buying is a better choice for you.

Leasing is basically another term for financing the use of a vehicle. Look for low APR lease deals. Often these are advertised by the dealer or manufacturer. These deals are only available to those who qualify, so make sure your credit rating is as good as it can get.

One of the trickiest dealer tactics is negotiating based on low monthly payments. Consumers easily fall into this trap because it sounds like a great deal. It's not! The lower the monthly payment, the longer the length of your lease will be. The longer the lease, the more the vehicle depreciates and the more interest you pay.

If you're looking for low monthly payments, you have options. Consider making a large down payment, this will decrease the amount you'll need to finance. Every bit of interest you can save is money in your pocket!

Make sure the vehicle is also covered by the manufacturer's warranty for the entire length of the lease term. You are required to maintain the vehicle while it is under lease. If the warranty does not cover the vehicle, this means out of pocket repairs and maintenance.

Review the lease contract carefully; dealers are required to itemize all charges and fees. Make sure all seem fair and logical, if not ask questions. This will be your last opportunity to make sure you get the best lease deal possible.

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