Leasing a new car is a very simple concept. It is like renting a car. While some people feel owning a car is the best way to go, new car leasing is the fastest growing segment of new car sales – and for good reasons.
- If you don’t have the cash to buy a car outright a lease can give you the opportunity to drive a vehicle that may otherwise be out of your price range.
- You can get into a new car more often.
- You pay tax on what you use, not a lump sum
- You’re not stuck with a car for 5 to 7 years or more.
- You don’t have to worry about selling or trading in your car. Just give it back at the end of the lease term or get into a brand new car.
- Your car is under warranty during the typical lease term, so you have no long term maintenance costs to worry about.
In the highly competitive world of the new car sales and new car leasing, it’s easy to get lost in the myriad of car lease deals, special offers and internet specials on new cars.
In order to secure the best lease deal, it’s crucial to do your homework. It may help you drive off the lot with exactly what you came for – or perhaps more.
An important first step is determining the residual value of the car you want to lease. This value is the vehicle’s estimated value at the end of a lease term. The ultimate source for this determination is the Automotive Lease Guide (ALG). A car with a high residual value means you will end up paying less per month on your lease
Many lease prices are predetermined by the OEM (car manufacturer). However, in some cases, you may be able to work with the car salesperson to secure the best MSRP (the manufacturer’s suggested retail price of the new car). Lowering the MSRP can lower monthly lease payments.
Otozip helps consumers find and compare new car lease deals at local car dealers and save up to 50% on new car leases in Los Angeles, Beverly Hills, Cerritos, Hawthorne, Long Beach, Manhattan Beach, Redondo Beach, Santa Ana, Torrance, Upland, West Covina, San Diego, Van Nuys, Santa Clarita, Miami, West Palm Beach, Delray Beach, Boynton Beach, Fort Lauderdale, Miami, South Florida and many more new car dealers in new locations being added every day.
Here are some helpful tips to get the best lease deal on a new car
- Obtain your credit score. The stronger your credit score, the better your chances of negotiating a great deal.
- Select a few vehicles you’re interested in that match your budget. This will give you options if your first deal doesn’t work out.
- Identify lease type. There are two new car lease types, closed ended or open ended. Closed ended lease deals sets the vehicle’s residual value at the time of negotiation and at the end of the contract the, lessor generally pays for excessive wear and tear and any excessive mileage fees. Open end new card lease deals determine residual value at the expiration of the lease contract. In an open ended lease deal, at the end of the car lease term, if the residual value is higher than current market value the car leasing company owes the lessor money. Conversely, if the residual value is lower than current market value, the lessor owes money to the car leasing company.
- Compare interest rates. In a new car lease, the interest rate is called the “money factor.” Typically, the longer the car lease contract, the higher the interest rate/money factor. Knowing prevailing market rates can ensure the best opportunity to secure an optimal lease deal.
- Look for special offers: Rebates, special offers (like military and affinity discounts), introductory offers, lease rebates and other car manufacturer specials are a great way to save money on a new car lease.
- Compare terms and conditions. Go through all fine print and terms and conditions and make sure you are comfortable with them.
The following terms are handy in knowing the ins and outs of the leasing market.
Capitalized costs are all items of value included in a lease that are financed.
A capitalized cost reduction is the down payment used to reduce the financed amount.
Termination or disposition fees are charged at the end of the contract when the vehicle is returned to either cover disposal or auction.
Gap insurance refers to that insurance a consumer takes out to cover cost owing more than the car is worth in the event of total car loss from theft or other action.
Inception fees are charged for filing the legal paperwork associated with a lease.
Top Cars to Lease
When it comes to leasing there are several manufacturers who top the list of as some of the best vehicles to lease. On the opposite end of the spectrum there are also certain brand names that may not have the best lease offers at the time you.
Some of the Top companies for new car lease deals are Honda, Toyota, Audi, Hyundai and Volkswagen.
Luxury and exotic companies like Mercedes, BMW, and Jaguar retain their value well after three years.
Sport Utility Vehicles: SUVs are popular and highly coveted by consumers, making them a great option when looking to enter into a lease deal.
- Watch your mileage: Many lease deals set term limits on yearly mileage. Overage charges on mileage typically range from .20 to .50 cents a mile.
- Drive with care. Leasing companies usually allow for normal wear and tear, but you’ll need to keep up with necessary maintenance. Treat your vehicle with care and you can save you money at the end of your lease.
- No modifications. You’ll need to leave the car in the same condition it was in at the beginning of the lease. Unlike purchasing a car, you cannot modify a leased car.