Best Car To Lease
The best car to lease in a certain period isn’t as hard to find as you might have thought. Although choosing a certain car make and model is a personal matter of taste and desire you should know that your choice can make a huge difference when leasing. Common knowledge tells us that the best deals come with those cars that have high lease-end residual value, low lease rate (money factor) and low lease price.
The high lease-end residual value we mentioned above is a significant part of a good lease deal. The residuals are in most cases expressed as a percentage of MSRP. A car that has a 60% residual percentage will usually be better than a vehicle with a 45% residual percentage.
You should know that some car makers and models have higher comparative residuals in comparison to other makes and models. To get a clearer image, most of the cars made by BMW, Mercedes, Honda, Lexus, Porsche and Acura have higher residuals in comparison to models rolled out by Hyundai, Kia, Chrysler, Dodge, Ford and Chevrolet.
The aforementioned money factor is also very important in any car lease deal. It is related to the interest rate and can be converted to APR by multiplying by 2400.
To get a good deal, take into consideration the discounted lease price which plays a major part. The car dealers can contribute to a certain limit to a discounted listing price, but if the company that made the car starts rolling out rebates as well as other incentives, you could save a bundle. If you are able to obtain a price that is close to the dealer invoice price, you got yourself a pretty good deal.
To sum up what we talked about before, the most sought-after offers regarding the best car to lease would be the one in which the automaker offers a “subvented” deal, in which he can provide a combination of high residual value, low money factor and most important, a discounted price tag.
If you have found a car lease that you think is suitable for your needs, make sure that you take a very close look at the fine print and see if you can live with the required conditions, like down payment, annual mileage limits as well as lease terms. Don’t forget that you should have a very good credit score in order to qualify for such a deal. You probably have read many advertisements that said “only available to highly qualified customers”- this is what they were actually talking about.
Without the aid of promotional “subvented” lease deals from automakers, the deal which you plan to make might not be just as good as you had hoped. Because the dealer cannot control the residual values and the lease rates, the only element left for the buyer to negotiate is the lease price. You could very well ask the car dealer if he can offer you alternative lease sources, such as large national banks like Wells Fargo or Chase that might give you more affordable rates. This situation is more probable for customers that plan on leasing high-end luxury cars.
Don’t forget to take your time and shop around at other car dealers, although if you decide to go to the dealers that are selling the same brand cars, you will most likely get the same offers as they use the same financial institutions. However, give it a go; you might be pleasantly surprised by the outcome of your search.
If you live in Canada you are out of lock because the independent leasing firms are much harder to find than in the United States, which means that you will most likely get stuck with the automaker’s finance company. This is why in Canada there are higher costs than in the US.
If you don’t know what it means to lease a car, it means that you will be signing a leasing contract in which you will agree to make all of the monthly payments, keep the appropriate car insurance, pay any taxes and licensing fees as well as take proper care of the car. In the contract you will agree to keep the car for a determined period, usually 24, 36 or 48 months. After the lease expires, you must return the car to the leasing firm with no more than normal wear and tear. If any damages have occurred or if you have driven the car over the contract-specified limits, be prepared to pay extra.
When putting down the contract in writing, you could add the possibility to buy the car when the lease period ends. Another way to go is to trade-in the car for a new one. Otherwise, you will simply have to return the vehicle to its rightful owner and walk away but don’t forget about the equity value in your car that you do not want to simply give away to the financial institution.
In the end, here are the advantages and disadvantages of looking for the best car to lease:
a) Upgrade to new / different car every few years;
b) The car will be under warranty during the entire contract in most of the cases;
c) Depending on the contract specifications, the lease may provide lower monthly payments in comparison to purchasing the car with regular loan terms;
d) You will be paying lower sales tax due to the reason that you aren’t paying tax on the entire car purchase price.
a) Not all deals are equal which means that in some markets a regular lease may end up being more expensive;
b) If you decide to terminate the lease earlier, it would cost you a lot of money;
c) The mileage restrictions can be a huge impediment;
Due to the fact that the car doesn’t belong to person that takes the lease, you will not be allowed to make any modifications to the vehicle.
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