Car dealers use a standard math formula to calculate monthly car lease payments. It’s a formula that is used throughout the industry.
The formula has two major parts. One is the part of each payment that pays for the leased car’s depreciation in value over the life of the lease. The second is the part that is finance charge, since leasing is a form of borrowing, like a loan.
In most states there is also a monthly sales tax on the lease payment. Continue reading Lease Payment Formula
Your credit score determines your finance rate (interest or money factor) when you buy or lease a car. It’s important you know your score before visiting a car dealer.
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A car lease always has lower monthly payments than a comparable car loan, for the same car.
Does that mean leasing is always a good deal?
No, not necessarily. There are good lease deals, average deals, and bad lease deals, just like with any kind of business transaction or purchase. How is it possible to tell the difference when presented a lease offer by a car dealer, or when looking at a leasing ad or commercial on TV?
Here’s how it’s done. Continue reading Car Lease – Good Deal or Bad Deal
You may already know from reading our Lease Guide that leasing provides much lower monthly payments — 30% to 60% less — than car loan payments.
Getting a good price is certainly important. However, to achieve the highest savings on a car lease , several other factors are also important. Actually, the make, model, and style of vehicle you lease can make a huge difference in your lease cost, and it’s not because prices are different. Find out why. Continue reading Leasing a New Car Cheap
Car leasing is good way to drive a new car for many people, but it’s not for everyone.
Whether you should lease, or buy, your next new car depends on your answers to a few simple questions related to how many miles you drive, how often you want a new car, the stability of your lifestyle, how your care for your vehicles, and whether the concept of ownership is important to you.
Let’s take a look. Continue reading Should You Lease Your Next New Car?
When leasing a car, you are required to have full-coverage auto insurance, which means not only legally-required liability coverage but also collision and comprehensive coverage.
Since your lease contract specifies exactly what amount of coverage is required, it might cost more than you would otherwise pay. Continue reading Car Lease Insurance Explained
We’ve already discussed the pros and cons of leasing a car compared to buying. But we haven’t looked at the math of leasing versus buying with a loan.
Simply stated, car lease payments are about half of loan payments for the same car, assuming the same 3-year term. The reason is simple. It’s because with leasing you only finance the portion of a car’s value that you’ll use up during the lease term, not the entire value as you would if you purchased with cash or with a loan. Continue reading Lease vs Buy Comparison
Leasing is often confused with renting which leads to the conclusion that leasing a car is easy, even with bad credit. Not true.
In fact, leasing is a form of financing, similar to a loan, and requires good credit, often better credit, than buying with a loan. Because leasing usually requires no down payment and monthly payments are lower than for a loan, the lease finance company takes a bigger risk with leasing.
Even with bad credit, there are still some options for leasing. Continue reading Car Leasing and Bad Credit
Car Leasing — a form of new-car financing, similar to a loan. It is not renting, although it shares some of the same characteristics. It offers a brand new car under warranty every 2-4 years, relatively low monthly payments often with no down payment, less sales tax (in most states), and a convenient walk-away return at lease-end. Alternatively, the car can be purchased at lease-end for its remaining value. Continue reading Understand Car Leasing
The best cars to lease are those that have the highest future resale value, called residual value in leasing.
It’s because monthly lease payments are based on the difference between vehicle price and residual value. The smaller the difference, the lower the payments and overall lease cost.
Typically, car makes and models that have a reputation for high quality and reliability have high residual values. So do vehicles that are and will continue to be big sellers — popular vehicles. Most luxury models have high residuals and are good lease vehicles. Continue reading Best Cars to Lease
When shopping for a new car, a common question frequently comes up, “Is it better to lease or to buy a car?
The answer is different for different people. While leasing offers many benefits to some people, it’s not right for others.
Leasing is best for those who like having a brand-new car every 2-4 years, only drive a normal amount of miles (about 10,000-12,000) each year, take good care of their vehicles, and have a stable lifestyle such that they will not want to end their lease early (expensive). Continue reading Is Leasing Right For You?
Vehicle price is a very important factor in car leasing. In fact, price should be negotiated when you lease, just as you would if you were buying. The lower the price, the lower the payments.
Although price is the only factor truly negotiable in leasing, look for special lease deals offered by car manufacturers that not only have a reduced price but also have a boosted lease-end residual value and low money factor (finance rate) — to create an overall great deal that needs no further negotiation. Continue reading Best Car Lease Deals
You have a number of options and choices when you lease a car. You can of course choose any new vehicle you want, but you can also decide on the length of the lease in months (lease term), the mileage allowance, whether to buy extra miles if you think you need them, buy GAP insurance if it’s not provided for free, and whether to make a down payment (cap cost reduction). You can also choose, or refuse, to purchase add-on products and services offered by your dealer. Continue reading Car Lease Options and Fees
When you lease a new car, you sign an agreement that obligates you to certain terms and conditions for a specified length of time. You also have certain rights that are provided by that agreement.
Among the terms of a lease contract are: that you agree to make payments, in advance, every month, that you keep full coverage insurance on the vehicle, that you do not make modifications to the vehicle, that you maintain it according to the manufacturer’s guidelines, that you stay within your mileage allowance, and that you return the vehicle at lease-end in good condition. You also have the right to purchase the vehicle at lease-end for a guaranteed price specified in your lease agreement. Continue reading Car Lease Rights and Responsibilities
The final stage of a car lease deal is the signing of your contract. It’s important to understand what’s in the contract and that all the information in it is correct before you actually sign.
Since lease contracts are a bit difficult to comprehend, we’ll point out some of the key things you should look for in order to make sure it’s all right and that it agrees with what you believe to be the correct details.
It’s easy for dealers to make “mistakes” and miscalculations. It may be too late to get errors corrected after you sign. Continue reading Closing a Car Lease Deal – Lease Contract