Okay, first things first—is leasing right for you? The decision to lease or buy has a lot to do with how you drive, as well as your ability to make a realistic estimate of how long you’ll want to drive the same car. If you’re someone who, historically, wants to run out and buy a new car once you’ve made the last car payment on your current car, leasing may be right for you.
You see, the person leasing you the car expects it to have a certain value when you turn it in—you’re paying the difference between a sale price and the estimated worth at lease’s end. Because that is a smaller amount to be financing, you’re paying less per month. But at the same time, when the lease is up, you have nothing to trade in or sell to put toward your next car.
So, you need to gauge what’s important to you.
Leasing lets you:
- Drive a more expensive car for the same monthly outlay as purchasing a lower-priced car.
- Always drive a car that is no more than two or three years old.
Buying lets you:
- Sell the car pretty much whenever you want
- Do whatever you want to it
- Put a lot of miles on it without penalty
- Possibly have no car payments for an extended period.
If you decide leasing is right for you, here are a few more things to consider.
Keep the lease length within the manufacturer’s warranty. This is typically three years. Remember, if you start having to make repairs or more expensive maintenance to a leased car, it’s money you won’t be recouping.
Make sure the included miles reflect your real driving. The last thing you want to do is worry that you’re going to pay a mileage penalty when you turn in your car. Leasing should be a worry-free way to drive.
Keep an eye-out for manufacturer lease deals. Just like rebate or cash-back offers, car manufacturers regularly create special lease offers. However, make sure to read the fine print—monthly payment figures alone rarely make for apples-to-apples comparisons.
Finally, don’t forget you can still negotiate the actual price of the car. It’s a little trickier, because the estimate of the car’s residual value at lease end also impacts your monthly payment, so make sure you check both figures before you close the deal.