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For over 20 years, I’ve worked with leasing and automotive asset management companies, creating the very contracts you encounter when leasing a car – those same contracts that outline monthly payments, maintenance terms, mileage allowances, and lease duration. Behind all those figures and details, there was someone responsible for bringing it all together, and that person was me.
Previously, I worked as the Forecast Manager at CAP HPI in the UK, which is similar to Kelly Blue Book in the US. I oversaw residual values for every commercial vehicle in the UK, and manufacturers relied on the prices I generated to accurately assess leasing costs for their customers.
I’ve also partnered with manufacturers on research and development projects, gaining valuable insight into how they provide vehicles to the leasing industry.
While this isn’t an exhaustive deep dive into the specifics of leasing, it will give you a solid overview of where and how you can save money and how to get a lower car lease payment.
Never, under any circumstances, tell a leasing company what you’re willing to pay for a vehicle!
Why?
Automated Pricing: Most vehicle lease prices are automatically generated based on data from external sources, such as industry guides or market data providers. These prices are typically adjusted based on the lease term (duration) and mileage allowance you specify.
Preset Parameters: For many vehicles, the price calculation is straightforward and falls within preset parameters. The leasing company simply adjusts the price based on the details you provide, such as how long you want the lease to last and how many miles you plan to drive.
Pricing Exceptions: Some vehicles, especially those in high demand or with special configurations, don’t fit neatly within these preset parameters. When this happens, the pricing gets handed over to the leasing company’s internal pricing team for manual adjustment.
The Trap: At this stage, the leasing company will often ask, “What’s your budget for monthly payments?” This might seem like an innocent question, but it’s crucial not to answer. Why? Because once you reveal your budget, the pricing team now has a clear target. They will almost always offer you a price that’s just slightly below your budget, making it seem like you’re getting a good deal when, in reality, you could’ve gotten a better price.
Avoid disclosing your budget at all costs. Let the leasing company make the first offer based on their automated pricing, then negotiate from there. By doing this, you retain the upper hand and can push for more favorable terms without being anchored to a higher-than-necessary price.
This may seem obvious, but it’s one of the best ways to score a better deal.
Here’s how it works:
Leverage multiple offers to your advantage and don’t hesitate to ask for better rates. The more competition you create, the better deal you’re likely to get!
Discover the value of your cars options and specification!
Hang on, a replacement vehicle! what’s that?
A replacement vehicle is an alternative vehicle provided by a leasing company to a customer whose leased vehicle is temporarily unavailable due to major mechanical issues, accidents, or repairs that take it off the road for an extended period (typically 24 hours or more). This service is designed to ensure that the customer still has access to a vehicle during downtime, minimizing disruptions to their daily activities, and bypasses the insurance company paying a rental company a daily rate for being off the road – it’s usually reserved for corporate customers.
Don’t hesitate to ask for the removal of the replacement vehicle. It’s a reasonable request that can lead to significant savings, and get you a much lower car lease payment!
Looking to Lower Your Monthly Rate? Consider a Used Vehicle
Many people overlook the option of leasing a “used” vehicle or one classified as part of the “existing fleet”. However, this can be a smart choice for getting a reduced monthly payment.
Here’s why it works:
Surplus Stock: Leasing companies often have excess inventory because they order vehicles in bulk to secure discounts from manufacturers. These surplus vehicles may still be in pristine condition, sometimes even wrapped in plastic and waiting for new customers.
Depreciation Savings: If a vehicle has been sitting unused for about six months, its price will reflect that time in depreciation. This means you can benefit from a significant reduction in the vehicle’s cost, making it more affordable to lease.
Financial Impact: For instance, if you manage to save just $40 a month over a 36-month lease, that adds up to nearly $1,500 in total savings. And remember, $40 is a conservative estimate—by following the tips in this eBook, you could potentially save even more!
Don’t dismiss the idea of leasing a used vehicle. It’s a practical way to get a great deal and make your monthly budget more manageable!
Every leasing company has its preferred customers and corresponding pricing structures. You could become one of those valued customers!
What Are Corporate Rates?
Corporate rates represent the best possible price for a specific vehicle tailored to a particular customer. And contrary to popular belief, these rates aren’t just reserved for large corporations with fleets of vehicles; even individual customers can access them!
Ask the Right Questions:
Simply asking, “What is your best corporate rate?” can lead to significant savings when pricing your vehicle. This prompts the sales team to reference their best available pricing, which could lead to a more favorable monthly lease payment.
Avoid Revealing Your Budget:
However, be cautious—if you disclose what you’re willing to pay upfront, you might lose out on the best corporate rate. The sales team will then base their offers on your budget, which could prevent you from securing the most competitive price.
Don’t hesitate to ask about corporate rates, and keep your budget to yourself to maximize your chances of getting the best deal!
It’s important to remember that including optional extras in your lease will come with added maintenance costs. If you choose to add features that require additional servicing, be prepared for the associated upkeep expenses.
Understanding Maintenance Costs:
The cost to maintain these extras typically hinges on how the leasing company handles maintenance. They may either outsource the work to the Original Equipment Manufacturer (OEM) or manage it in-house through their own service and maintenance partners. Both options are standard practices and can be reasonable in terms of overall expenses.
Factors Influencing Costs:
Interestingly, maintenance costs aren’t solely based on the price of the asset itself, as they’re integrated into the capital cost and depreciated accordingly. Instead, these costs are influenced by factors such as reliability, repair speed, labor rates, and average parts costs. For instance, Tail Lifts have both electrical and mechanical components that can be prone to failure, necessitating regular inspections.
Here’s some Examples:
Since these maintenance costs can add up, be cautious when specifying optional extras. It’s wise to consider the long-term implications on your lease agreement and budget accordingly!
If you plan to drive your leased car extensively, it’s crucial to be aware that high mileage may lead to additional costs for engine and gearbox replacements included in your leasing agreement.
Understanding Replacement Costs: Leasing companies often factor in the expected wear and tear associated with your vehicle’s mileage. If you exceed the manufacturer’s recommended mileage limits, you may incur charges for repairs or replacements, particularly for critical components like the engine and gearbox.
Check Warranty Details: Before committing to a lease, find out the manufacturer’s warranty specifics, including its duration and mileage coverage. For example, if a vehicle comes with a three-year warranty and unlimited mileage, you can lease it for that period without worrying about unexpected costs for engine or gearbox replacements.
Strategic Leasing: If you anticipate driving a lot, consider asking the leasing company for assistance in selecting a vehicle that meets the manufacturer’s recommendations for both warranty coverage and your intended mileage. Alternatively, you might opt for a shorter lease term to return the car before reaching high mileage and incurring potential penalties.
Since these maintenance costs can add up, be cautious when specifying optional extras. It’s wise to consider the long-term implications on your lease agreement and budget accordingly!
When considering your leasing contract, it’s important to select a hire period and mileage that make financial sense. Contracts lasting between 12 and 18 months may seem appealing, but they often lead to higher costs.
Understanding Depreciation: Depreciation significantly impacts a vehicle’s value in its first year. For instance, if you lease a car valued at $20,000, it might drop to around $14,000 after 12 months and 20,000 miles. This means your monthly payment would be approximately $500, calculated by dividing the $6,000 depreciation by 12 months.
In contrast, if you extend your lease to 24 months and increase the mileage to 40,000 miles, the vehicle’s estimated value drops to $11,000. Your monthly payment would then decrease to around $375, despite the vehicle being worth $3,000 less. This demonstrates how longer lease terms can benefit you due to the way depreciation percentages work.
Key Considerations: I recommend leasing for at least 24 months while also factoring in your expected mileage. If you plan to drive around 50,000 miles per year, extending the lease to 60 months may not be cost-effective, as leasing companies will include potential major mechanical failure costs, like engine replacements, in your pricing.
Choosing a sensible hire period and mileage will help you avoid unnecessary costs and get the most value from your leasing experience!
Where your car will be used can significantly impact your leasing costs. For instance, coastal areas, typically incur higher lease prices than those primarily driving on well-maintained highways.
Key Insights: If you plan to use your car in an area where it might encounter harsh conditions—such as unpaved roads or saltwater exposure—the leasing company will likely account for these risks. Therefore, it’s best to avoid mentioning specific usage scenarios unless it’s essential for your leasing agreement.
By keeping details about the vehicle’s operating environment to yourself, you may have a better chance of negotiating a more favorable deal and sidestepping unnecessary additional costs in your lease!
It’s essential to recognize the psychological tricks companies use in pricing. Many leasing companies often quote prices to the nearest penny, but you should remain skeptical of this practice.
Understanding Pricing Strategies: Leasing companies typically round their prices to the nearest cent. However, they may employ psychological pricing tactics to create the illusion that you’re getting a better deal. For instance, a vehicle priced at $296.14 is fundamentally the same as one listed at $299.99 or $300.00. The difference in price isn’t based on any significant value but rather on how the leasing agreement has been structured.
Key Insight: All leasing prices are negotiable, regardless of how they are presented. If a company insists that they cannot lower a price ending in a penny, it’s likely a tactic to discourage negotiation. Don’t accept this as a final answer; there’s often room for adjustment.
Stay vigilant and challenge any pricing that seems designed to mislead you. Approach the negotiation with confidence, knowing that every price can be revisited and potentially reduced to better suit your budget!
When selecting your next car, one incredibly important factor to consider is the vehicle description.
Navigating the world of car buying can feel overwhelming, especially with the complex naming conventions used by manufacturers. It might be best to rely on the experts, as some descriptions can be confusing and hard to understand. However, there are times when you need to be very clear about what you want, including the specific purpose of the vehicle. Other times, it’s better to let the pricing team interpret your needs.
 Here’s what you need to know:
Navigating Complexity:
Be Specific:
The pricing team within a leasing company focuses on minimizing risk and maximizing profit, often paying attention to details you might overlook. Here is an example to illustrate:
Example: Ford F-150 XLT (providing too much information)
When it comes to car leasing, the hire period typically ranges from 12 to 84 months. Here’s what you need to know:
Avoid Short-Term Contracts:
Impact of Maintenance Costs:
Commitment Level:
One of the first signs that a vehicle isn’t priced competitively is when a leasing company gives you a price rounded to the nearest dollar, five dollars, or ten dollars. Instead, you should look for a more precise pricing approach, down to the individual cent. Even then, there’s usually room to negotiate for a better rate!
The Pricing Tactic:
Understanding the Game:
The basics of how a leasing company functions are pretty simple, akin to borrowing money from your bank. To help you find ways to save money, it’s essential to grasp how leasing companies acquire their vehicles and the costs involved.
Open Checkbook Concept:
The Bank’s Perspective:
Where’s the Risk?:
Leasing Company’s Approach:
For those who may not know, the residual value of a vehicle, including cars, vans, trucks, motorcycles etc, refers to its estimated worth at the end of its “usable life” – typically around five years in leasing terms. For example, how much is your Ford F-150 or Honda CR-V worth after five years?
In the United States, two leading resources for determining residual values are Kelley Blue Book (KBB) and Edmunds. These organizations are essential for automotive leasing companies, as they provide the necessary data to quote lease rates based on projected vehicle values.
I spent several years in the industry, gaining insights into how these organizations price vehicles based on various factors, including:
These companies gather pricing data daily through auto auctions across the country. Here’s how it works:
Once a leasing company identifies your vehicle, they evaluate its projected worth based on:
KBB and Edmunds offer both future and used pricing, providing leasing companies flexibility:
This dual-pricing strategy allows for greater negotiation leverage and accountability in pricing practices. However, companies are not financially accountable for their data, as they position it as a “guide.”
Despite their resources, KBB and Edmunds sometimes face challenges, such as:
Understanding how residual values are calculated can empower consumers to make informed decisions about leasing and purchasing vehicles in the US market.
The capital cost of a leased car is the total cost of the vehicle, minus any discounts, plus the cost of any selected options. Maintenance fees are not included in the capital cost calculation.
For example, let’s take a Ford Mustang with a list price of $50,000. If we secure a 10% manufacturer discount, the price drops to $45,000. If the customer adds a $1,500 performance package, the capital cost becomes $46,500. Pretty simple. From here, they’d determine your monthly car lease payment by considering both the residual value and the capital cost, as well as any added options or maintenance packages.
The capital cost is largely fixed when it comes to new cars. Leasing companies negotiate directly with manufacturers and get predetermined pricing, so there’s no room for customers to haggle over the capital cost.
In some cases, if you’re looking at more specialized or custom vehicles, like a Porsche 911 or Tesla Model S, the capital cost can be impacted by how the car is customized or modified.
The only way to truly adjust the capital cost is by leasing used cars. Unlike new vehicles, the capital cost of a used vehicle is based on its current market value rather than its original list price. This flexibility allows for more competitive pricing.
For example:
If the leasing company feels the initial lease rate is too high, they can often rework the capital cost, especially when leasing used cars. For example, if a 2017 BMW 5 Series feels too expensive at first glance on a monthly lease, they can adjust the capital cost based on its actual retail value today, creating a more reasonable monthly payment.
When financing a car through a bank in the US, the lender typically charges interest on the loan amount. However, if you’re leasing a vehicle, the leasing company often acts as the middleman between you and the bank. They borrow money from the bank, but when passing the cost onto you, they may mark up the interest rate to increase their own profit margin. Here’s how it works:
Leasing companies don’t simply pass along the exact interest rate they pay to the bank. Instead, they typically add an extra percentage to cover their operating costs and secure a profit. The final interest rate you pay on a lease depends on several factors:
If you’re a business or a larger customer, leasing companies may offer more competitive rates to secure your business, especially if they know they’re in competition with another leasing company. For example:
When negotiating a car lease, it’s worth asking the leasing company for their lowest available interest rate or mentioning that you’ve received a lower offer from another company. Leasing companies often have flexibility when it comes to interest rates and might honor a request for a lower rate to secure your business. While it can be challenging to determine how much they’ve marked up the interest, a strong negotiation could save you a significant amount over the term of the lease.
Leasing companies rely heavily on the discounts they get from car manufacturers, and it’s the key to keeping their rates competitive. Without these discounts, leasing companies simply couldn’t operate. In the U.S. market, there are three primary sources for these discounts:
Additionally, there’s often a fourth discount in the form of a rebate, but this typically only applies to large leasing companies that buy cars in bulk, offering them an extra 2 to 3% off.
These different discount sources work together to give leasing companies the best possible deal, though not all of those savings are passed on to the consumer. However, understanding how these discounts work can help you spot potential savings opportunities.
For example:
A leasing company might secure a 20% manufacturer discount, a 15% dealer discount, and a 3% rebate. Altogether, this could mean up to 38% off the car’s list price.
Let’s break that down with a real example:
That means the leasing company is only paying $31,000 for a vehicle listed at $50,000!
The more vehicles a leasing company buys, the bigger the discount they can negotiate. Large leasing firms or fleet operators often purchase hundreds or even thousands of vehicles, which leads to significant savings.
For example, Enterprise Fleet Management might get steep discounts on popular models like the Ford F-150 or the Chevrolet Equinox because of the sheer volume they purchase each year. Manufacturers like Ford or Chevrolet may offer aggressive discounts to maintain or grow their market share in specific segments, such as trucks or SUVs.
On the other hand, certain brands, like Tesla or Jeep, might offer fewer or smaller discounts because their vehicles are in high demand and customers are willing to pay close to full price. For instance, a Tesla Model Y or a Jeep Wrangler might have very limited discount availability due to their popularity.
Discounts can fluctuate based on timing. For example, when a new model is first released, there might be little to no discount available. If the 2024 Chevrolet Corvette is just hitting the market, discounts will likely be minimal due to high demand and low supply.
However, if you lease a vehicle nearing the end of its model year, like a 2023 Toyota Highlander just before the 2024 models are introduced, you could snag a much better deal. Automakers and dealers are eager to clear out the previous year’s inventory, which can result in significant savings for the leasing company and, in turn, the consumer.
Avoid newly released models: Vehicles like the latest Tesla Model 3 or Dodge Challenger may have very little in the way of discounts when they first hit the market. Leasing a car too early after its release will likely mean paying near full price.
Wait for year-end deals: You’ll often find better discounts as the current model year comes to a close. For example, a 2023 Honda Civic may have more favorable pricing toward the end of the year as dealerships and manufacturers try to clear inventory for incoming 2024 models.
Negotiate wisely: Sometimes, knowing when to ask for extra discounts—especially on options or accessories—can help. While the base vehicle might have a standard discount, additional features like navigation systems or premium sound systems may also be eligible for reductions, especially toward the end of a sales period.
When it comes to leasing, tires fall into three main categories: Standard, Premium, and Specialist.
Standard tires are the typical, no-frills tires that come with most vehicles straight from the factory. These are the most affordable option and cover a range of budget and mid-tier tires. When pricing out these tires for a lease, we’ll typically check with our suppliers or use an internal pricing matrix. We’ll consider any variations like all-season, summer, or winter tires and then average the cost. Standard tires are designed to give you the lowest cost, so even if we can’t supply the absolute cheapest option, you won’t end up paying more than necessary.
For example, a standard Toyota Camry might come with generic Goodyear or Bridgestone tires. We’ll calculate the cost based on these brands and ensure that the price covers any variations in type or season.
Premium tires are higher-end tires you’ll typically find on luxury or performance vehicles. These include brands like Michelin, Pirelli, and Continental. Premium tires are more expensive because they’re built for better performance, higher speed ratings, and heavier vehicles. For instance, a Chevy Tahoe or Ford Mustang will often come equipped with premium tires that handle better and offer a smoother ride.
You’re paying for quality here, and it shows. It would look odd if a high-end vehicle like a Cadillac Escalade was rolling around on cheap tires, right? Premium tires are a significant upgrade, but they also add a lot of value to the driving experience, especially for vehicles that require extra weight or speed capacity.
Specialist tires are designed for specific needs, like extreme off-road use. You’ll see these on trucks and SUVs that are built for rugged terrain, such as the Jeep Wrangler or Ford F-150 Raptor. These tires are built for performance in challenging conditions but tend to wear out faster if used primarily on highways. For instance, a set of heavy-duty off-road tires might have about 5,000 fewer miles of life compared to standard all-season tires when used for daily commuting.
Typically, vehicles like Ram 2500 Power Wagons or Toyota Tundras with off-road packages will require specialist tires that are priced higher due to their specialized construction. Leasing companies account for the shorter lifespan of these tires when calculating your monthly rate.
Tire life plays a major role in determining the overall cost of a vehicle lease. The lifespan of your tires depends on several factors, including the type of vehicle, how it’s used, and how many tires it has. For example, standard passenger cars are priced assuming tires will last around 20,000 to 30,000 miles, while heavy-duty trucks like Ford Super Duty models may get anywhere between 25,000 and 70,000 miles, depending on the weight and driving conditions.
Vehicles like Chevy Silverados with double rear wheels, also known as duallys, will have more grip but also more tires to replace, which affects the overall lease cost. Tire wear also depends on the vehicle’s setup. For example, trucks with four-wheel drive or additional features like self-leveling suspension can put more stress on the front tires, leading to faster wear.
If you let the leasing company know how you plan to use the vehicle—whether for heavy hauling, off-roading, or everyday driving—they can often adjust the pricing to reflect the tire life expectancy more accurately.
The cost of tires is worked out by calculating tire life vs. contract mileage, the number of tires required, and the tire brand. If you plan to drive a lot over the lease term, the leasing company will compare that to the expected lifespan of the tires. For most vehicles like a Toyota Rav4 , tires are expected to last around 20,000 miles. However, if you opt for premium tires, they might last longer, but they’ll also come with a higher price tag.
If your lease specifies premium tires, we adjust the price accordingly. For instance, if you require all-season Michelin Defender LTX M/S tires, we’ll factor in the added cost. And don’t forget that some vehicles, especially dually trucks like a Ram 3500, have double rear wheels, meaning your rear tires will cost the same as an entire set of tires on a standard four-wheeled car.
When leasing a car, you might think that service costs don’t vary much. After all, most cars need regular maintenance like oil changes and tire rotations, right? Well, it’s not that simple.
Every vehicle has its own service costs, and these can vary significantly. For example, servicing a Toyota Camry will cost a lot less than servicing a Chevrolet Tahoe, and this difference is factored into your monthly lease payment. So, it’s important to know how often your vehicle needs servicing and what those costs are, as they will impact your overall lease price.
The number of services you’ll need and how often those services occur during your lease term are two different factors.
Let’s say you’re driving around 10,000 miles a year and you’re considering a sedan. The Honda Accord might be a solid choice because its service interval is about 10,000 miles. But if you’re driving closer to 20,000 miles per year, the Toyota Avalon could be a better option since its service intervals are more spaced out.
For example, over a 3-year lease driving 20,000 miles annually, you’d need six services for the Accord, but only three for the Avalon. Not only does this mean less time at the shop, but you’ll save money on service costs too.
Many people overlook this when choosing a car, but it’s a critical factor. Vehicles that seem like a good deal upfront might require more frequent servicing, which adds to your long-term costs.
Some leasing companies don’t have in-house service facilities, so they outsource servicing to third parties, like your car’s dealership. This can lead to extra costs, especially if the vehicle needs to be picked up and delivered back to you.
For instance, if you’re leasing a Jeep Grand Cherokee, the company might send it to the Jeep dealership for service. This might make sense financially since it helps preserve the vehicle’s resale value (especially important if you’re planning to buy the car after your lease). However, it can also be more expensive than in-house servicing.
Always ask if pickup and delivery are included in your lease package, as some companies will charge extra for this, especially if you’re far from the service center. Make sure you understand what’s included in your service package before signing your lease.
Be extremely cautious when it comes to early terminations in leasing contracts. Many leasing companies include vague statements like, “early terminations will be subject to fees.” That’s probably the most ambiguous sentence you’ll come across.
Do you think they’ll happily let you pay a small $300 early termination fee and walk away from a $30,000 vehicle? Absolutely not. If you sign a 3-year lease and want to terminate after only six months, you’ll likely end up paying at least 50% of the remaining lease value if it’s a rental company, and possibly the full amount if it’s a standard leasing company.
I recently calculated the early termination for a similar situation, and it ended up being 50% of the asset’s total value—meaning tens of thousands of dollars gone.
Sometimes customers try to game the system, thinking they can lock in a low long-term monthly rate and get out of the deal early. For example, someone could lease a vehicle for 5 years at a very low rate but decide to return it after just 10 months. Most companies have safeguards in their contracts for this, but smaller, newer leasing businesses might overlook these details.
How lenient a company is with early termination fees can also depend on your relationship with them. If you’re a long-standing customer or you have multiple vehicles on lease with them, they may be more flexible with reducing fees.
Although life and work situations can change unexpectedly, it’s a good idea to plan for the near-term financial future before committing to a lease.
Article By: Dale Ogden
Dale is a recognized expert in the automotive industry, known for his expertise in automotive asset management and consulting.
As the founder of Check Your Spec and former Forecast Manager at CAP HPI (equivalent to Kelley Blue Book in the USA) he made significant contributions to the development of forecasting strategies and depreciation models for internal combustion engines, hybrid, and electric commercial vehicles in the UK.
With over two decades of experience, Dale pioneered EV forecasting models that are now used by leading manufacturers.
His work has also produced residual values for over 10,000 new vehicles.
Car leasing is essentially a long-term rental agreement for a vehicle. Instead of buying the car outright, you make monthly payments to use the car for a set period, usually between two to four years. At the end of the lease term, you return the vehicle to the leasing company, or in some cases, you may have the option to purchase it for a predetermined price.
Monthly lease payments are based on several factors, including:
Most leases include a set mileage limit, typically 10,000 to 15,000 miles per year. If you exceed this limit, you will be charged an excess mileage fee, usually calculated on a per-mile basis. These fees can add up quickly, so it’s essential to estimate your annual mileage accurately when signing a lease.
Early termination of a lease is possible, but it often comes with significant penalties. Many leasing companies charge fees based on how much time is left on the lease. For example, terminating a lease early after just a few months could cost up to 50% of the remaining lease payments. It’s essential to review the early termination terms in your contract carefully and ask for clarity on how these fees are calculated.
Residual value is the estimated worth of the vehicle at the end of the lease term. It is a critical factor in determining your monthly payments—vehicles with a high residual value will have lower monthly payments because they are expected to depreciate less. The residual value is also relevant if you’re considering purchasing the vehicle at the end of the lease, as it determines the buyout price.
Yes, you’re responsible for routine maintenance of the leased vehicle, including oil changes, tire rotations, and other scheduled services. Not maintaining the vehicle according to the manufacturer’s guidelines can result in additional charges when you return it. Some leases include maintenance packages, which can help cover these costs.
Service and maintenance packages cover routine services like oil changes, brake pads, and filter replacements. The cost of these packages depends on the vehicle, its service intervals, and whether servicing is done in-house or by a third party. For example, vehicles like a Toyota Corolla may be cheaper to service compared to a luxury vehicle like a Mercedes-Benz. It’s a good idea to compare service costs and intervals between different vehicles before signing a lease.
Leasing may be better for you if:
The money factor is the leasing equivalent of an interest rate. It’s used to determine the finance charge on your lease. While the money factor is usually marked up by the leasing company, you can negotiate for a lower rate. Even a small reduction in the money factor can significantly lower your monthly payments over the term of the lease.
Yes, many aspects of a car lease can be negotiated:
At the end of the lease, you typically have three options:
Leasing companies expect normal wear-and-tear, but excessive damage (like large dents, deep scratches, or interior damage) can result in additional fees. Before returning your leased vehicle, it’s a good idea to repair any significant damage to avoid paying for it later. Some leasing companies offer protection plans that cover certain types of damage.
Modifying a leased vehicle is generally discouraged because the car will need to be returned in its original condition (with allowances for normal wear-and-tear). If you add custom parts or make modifications, you may be required to remove them and restore the car to its factory state when the lease ends. Any permanent modifications may result in extra fees.
Yes, leasing a used car is possible and can offer lower monthly payments than leasing a new car. However, not all dealerships or leasing companies offer used vehicle leases. The process works similarly to leasing a new car, but with potentially lower depreciation, resulting in reduced monthly payments.
Sales tax on a leased vehicle is typically included in the monthly payment and is calculated based on your location. In many states, you only pay tax on the portion of the car’s value that you’re leasing, which is one of the benefits of leasing over buying, where the full price is taxed upfront.
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