Leasing is an excellent way to pay less for a new vehicle. Leasing even allows you to drive a new vehicle you might otherwise be unable to afford. When you lease, you only pay for the part of the vehicle you use, or the value it depreciates over the lease term.
Though not all lease deals are the same and leasing is not right for everyone, consumers looking to save money should consider it as an option.
Two main types of drivers should avoid leasing. Those who average more than 15,000 miles per year and those who drive a vehicle for long after they have paid it off. If you fit in either of these categories, buying a new vehicle is a better choice.
Consider leasing if you:
* Prefer to drive a new vehicle every few years.
* Regularly trade in your vehicle before it is paid off.
* Drive normal mileage, less than 15,000 per year.
* Prefer to avoid dealing with repair costs.
* Want to drive a higher-end vehicle.
If leasing seems like a good option for you, start by researching the following before visiting a dealership.
* Learn the factory invoice price and MSRP of the vehicles you are interested in.
* Research residual values of each vehicle. Remember the higher percentage of value a vehicle retains the less youíll need to pay to lease.
* Look for current manufacturer incentive programs. These lease deals are often the best available, they are only available to those who qualify, for a limited time. Youíre not likely to negotiate one of these offers lower.
* Review your credit score. If you have less than perfect credit, leasing may cost more. If possible take steps to improve your credit score before you lease.
Once youíve narrowed your new vehicle choices, request a quote from an online lease pricing service. Try TopCarLeaseDeals.com, the site is easy to use and works with pre-qualified dealers.
* Request free no-obligation lease price quotes from multiple dealers in your area.
* Compare offers from dealerships. Itís important to compare apples to apples. Make sure the offers are for the exact same model and lease term.
* Request the dealership drop acquisition fees, the security deposit, and any additional charges. Use this money to make a larger down payment.
* Compare different lease terms. It is best to select a lease between 24 and 36 months, as vehicles rapidly begin to depreciate the older they get.
* Select a close-ended lease. This means that you agree on a value for the vehicle at the end of the lease term. With an open-ended lease you pay for whatever the vehicle is worth at the end of the term, this could save or lose you money. Itís better not to gamble.
* Negotiate the capitalized cost of the lease before making any deductions. The capitalized cost is the complete cost of the vehicle, from which the residual value will be deducted.
* Compare interest rates. Aim to pay close to average for a new vehicle lease. Consider leasing through a bank or credit union, they could offer greater savings than a dealer.
Finally, carefully review the lease contract before signing. Terminating a lease early can be complicated and costly.