Auto Finance

Here’s How to Find the Best Cars for Leasing

By TheCarzingTeam September 20, 2022 | Auto Finance

Auto Finance

Not all car shoppers are car buyers. Some simply don’t want to commit to car ownership, and leasing makes the most sense. There are car drivers who don’t want to drive a car for years and like the convenience of a lease.

A lease can vary in length but is commonly around three years. During the lease period, the dealership handles basic maintenance. A lease also offers a lower monthly payment than a car loan (for the same car); this allows drivers to get more cars for their money. The best cars for leasing might change regularly as dealerships might constantly update their offers.

Here’s what car shoppers need to know to find the best cars for leasing.

Best Cars for Leasing

The Anatomy of a Lease

Those who are looking for their first car might be considering a lease. What is a lease and how does it work? A lease is often compared to a long-term rental. When an individual leases a car, they don’t own it. Instead, they are agreeing to borrow it for a specific length of time.

Leases can be shorter or longer in length; the most common terms are two or three years. During the lease period, the basic maintenance of the vehicle is handled by the dealership; common maintenance includes services like tire rotations and oil changes.

Since those who lease don’t pay to own the vehicle, the monthly payments are typically more affordable. However, there are stipulations in the lease that dictate driving limitations. Those who lease are limited in how many miles they can drive. If this mileage is exceeded, there are typically fees—these can become expensive.

Those who lease also are expected to maintain the vehicle properly. Any issues discovered when the car is turned in at the end of the lease also can result in extra fees.

Lease agreements typically include a purchase amount for those who are interested in buying their car at the end of the lease. Those who decide not to buy the car at the end of their lease simply just need to return the car. This flexibility is appealing to many drivers; in fact, some may then lease another new vehicle.

Best Cars for Leasing

When is a Lease a Good Deal?

Leasing a car could be a great deal for the right individual. Those who don’t drive many miles each day won’t necessarily have to be too concerned with the mileage limitations.

Some drivers don’t like to worry about basic maintenance and they like that they can take their car to the dealership and have these services covered for them. In addition, monthly lease payments are often less expensive than a monthly payment (for the same vehicle). Buyers might find that they can drive a better car for a lower monthly cost.

Entering into a lease also will require that leases pay certain costs upfront—this typically includes the first month’s payment and other fees. Taxes also may be included. Car shoppers should research the details of the lease deals for their favorite models. This helps shoppers know how much they will be expected to pay at signing so there are no surprises.

How to Find the Best Lease Deals

Dealerships might offer lease promotions on specific models. Shoppers that are interested in leasing a particular model might want to shop around to find the best offers in their area.

However, some popular models could be more difficult to find. In addition, with the supply chain crunch and the chip shortage, those interested in leasing might be able to be picky about their options. Colors or other features could be limited.

Determining a Budget

When leasing a car, shoppers might find it easier to budget. Buying a vehicle leads to trying to understand how loan terms and interest rates can impact the monthly payment. With a lease, the payment obligation can be a little more straightforward.

However, like buying a car, those who lease will need to go through a credit check. Chase explains that for the best deals, individuals will need a credit score of at least 700. Lower scores could impact deals and the price of lease payments.

For this reason, shoppers shouldn’t necessarily look at the advertised payments from dealerships and expect that this amount will be their exact payment. Terms can change per an individual’s credit worthiness.

How much should shoppers budget for a car payment or a lease payment? According to NerdWallet, the car payment should be less than 10 percent of monthly take-home pay. However, those who have fewer expenses might be able to budget a higher amount.

How the Supply Crunch Might Impact Lease Options

In the past, car shoppers might have been able to lease any model and find exactly the vehicle they wanted. In today’s tough auto market, though, supply has become more limited.

Those who want to lease might not be able to find a lease option for a specific vehicle, or they might have to wait to get the vehicle they want. Every dealership’s inventory situation might be different. Those who are interested in a specific model should contact their local dealerships to find out what’s available.

Since supply might be limited for many dealerships, shoppers might make a list of second and third options. They also might need to be more flexible about vehicle specs like color or features. An individual might really want a red SUV, but the dealership might only have a black SUV on the lot.

Best Cars for Leasing

Is a Down Payment Needed for a Lease?

Those who are considering a lease should be prepared for costs due at signing. However, shoppers might wonder if they also need to make a down payment.

A down payment might be able to lower lease payments. In some lease situations, a down payment could be necessary (like for those with poor credit). However, Carfax notes that making a down payment—especially a large one—isn’t really recommended. Again, though, individuals with bad credit might need to make a down payment.

When buying a new car, the down payment helps cover the decrease in value related to vehicle depreciation. Cars decrease in value quickly; in fact, once a car is driven out of the dealership, it loses 9-11% of its value.

For this reason, a down payment is beneficial. In addition, a down payment also can help ensure that the vehicle isn’t underwater; this means that the value is less than the balance on the loan.

Since a lease is a long-term rental, the car’s depreciation really isn’t an issue. Investopedia explains that a lease will typically require gap coverage; this insurance coverage pays the difference between the insurance settlement for the car and the outstanding price of the car in case of an accident.

Are Used Models Available for Lease

Typically, newer models are offered for a lease agreement. However, vehicles that are only a few years old also could be available for a lease option.

Buyers looking for older used vehicles can’t typically find a lease option. Used or pre-owned models are limited to standard purchase agreements. Buyers on a budget, though, might find that used models offer more price flexibility.

Use Carzing to Find Local Lease Deals

Car shoppers looking for lease deals can simplify their search by using Carzing. Search for vehicles by make/model or body type. Carzing will show all the vehicles available in the area.

Car shoppers who want to lease can use the toolbar to the left of their results to select lease under the Monthly Payment option. Shoppers also can specify other vehicle features like drivetrain, fuel type (electric and hybrid), paint color, equipment, and more.

Once shoppers update their search, the system will refresh to show all the vehicles that fit these specifications. These results also can be sorted by price or other criteria to ensure that shoppers see the most relevant options at the top of their page.

Shoppers who aren’t sure how much they can afford for a lease can use Carzing’s lease calculator to understand their options. Shoppers will need to enter data about the car in which they wish to lease, and the calculator will show estimated costs.

The calculator should only be used for informational purposes, though. The prices from the calculator should be used as a reference, but they are not an exact amount that buyers should expect. Every lease deal can be different, and a buyer’s credit score also impacts lease terms.

For shoppers who decide that a lease isn’t their best option and are interested in buying a car, Carzing can also be used to get pre-qualified for financing. Enter data related to work history and housing costs (mortgage or rent), and Carzing will display the loan options for which the buyer might qualify. Find the best interest rate or the loan with the lowest monthly payment.

Whether a car shopper is interested in leasing a car or buying a vehicle, Carzing can help them find the best options for their budget and their lifestyle.

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