5 Steps To Get a Good Auto Lease Deal

Even experienced car buyers can get confused when it comes to the best way to lease a car. The terminology is mysterious and it is difficult to understand what the monthly payment should be or what parts of the deal are negotiable.

Leasing is simply another way of financing a car and it is becoming more and more popular. Almost every third car leaving a car dealership is leased. This can be a great alternative for some people depending on their needs and lifestyle. If you conclude that leasing is what you need, here are five tips on how to make the best lease deal. If you already know which car model you plan to lease and don’t plan to buy it at the end of the leasing period, this leasing strategy is perfect for you.

Step 1. Choose a car that keeps its price
When leasing a car, you pay for its depreciation, as well as interest, taxes and some fees. If you take a car that keeps its value or depreciates less, your lease payment will be lower. Speaking of leasing, a car with a good resale cost has a good “residual value”. This means that the residual amount still remains high when the lease ends.

Many car sites and magazines publish annual listings of good lease cars. Look for the "best residual value." For some vehicles, the three-year residual value is only 45%, and the Kelley Blue Book’s Best Resale Value award belonged to Toyota Tacoma in 2016 with a residual value of 72.9%.

Step 2. Check out special leasing offers
When the car is not selling fast enough, the company may announce special leasing offers. These widely publicized deals afford a low monthly payment by changing the leasing method in one of several ways, such as suggesting a low-interest rate. To make sure this is a really good deal, make sure it doesn’t allow less than 12,000 miles or requires a high down payment, the so-called “drive-off fees”.

Step 3. Car price
Even if you are not buying a car, you still need to find the true market value of the car you want to lease. Using a price website such as Kelley Blue Book, Edmunds.com, or the National Association of Car Dealers, find the fair market price for the car you want to lease and the price of its invoice. The price of the invoice is approximately equal to the price that the dealer paid for the car, and is the lowest price you can find. However, there are many factors on some models, such as cash discounts for customers that may allow the dealer to price the car even lower than the invoice.

Step 4. Ask about lease payments
Choose the car with the best price, color, and options you want and contact the dealer who gave you the offer. Tell him you decided to lease the car. Ask him to give you the lease payments at the selling price that was indicated. Do not forget to set the conditions. Tell the dealer that you want to lease the car for 36 months with 12,000 miles and $1,000 for travel. Ask them to tell you the interest rate on which the lease is based. Speaking of leases, the interest rate is called a rental factor or a cash factor.

Step 5. Close the lease deal
Make sure that the contract matches your agreed selling price and conditions (leasing period and mileage). Most contracts will include acquisition fees, and many also require alienation fees. Safety fees are becoming rare. Also, make sure your lease includes GAP insurance.

If everything looks good, sign the documents, provide the dealer with a check to pay for the departure and make sure that you have car insurance. Remember that for three years of leasing you don’t have this car. Carry out all necessary maintenance work and take special care of the car in order to avoid penalties for excessive wear and tear at their delivery.