You’ve heard of friends leasing cars—but you’ve never really considered it. Why not? Leasing a car can save you money over the lifetime of the contract—and protects your bank account from unnecessary repairs.
You don’t have to commit to a five-year loan on a car and all of the associated challenges of doing so!
Learn more with our pro tips for leasing a car:
Tip #1: Experience Stress-Free Driving
One incredible benefit of leasing a car is that you don’t own it. And, when you don’t own the vehicle, you don’t have to pay for the repairs that are covered under the car manufacturer’s warranty. Best of all, perhaps, is that because leases are for only a few years and the car is new, it probably won’t experience a lot of issues. Basically, you’re almost guaranteed stress-free driving!
Tip #2: Select Your Car Carefully
There are two layers to this tip to keep in mind. First, remember that a car lease’s monthly payments are determined by the sale price of the car. If you select a higher sale price, your monthly payments will be higher. If you go lower, your payments will be lower. Also factored into the monthly payment is something called a residual value percent, which is supposed to cover the depreciation of the car over time. For a lower monthly payment, select a car with a highly-predicted residual rate.
Tip #3: Avoid a Down Payment
When you lease a car, you will have a lower upfront cost than you would if you were buying the car. An example is in what one must do before buying a car, including saving money or selling items for a down payment and either trying to sell one’s car or trading it in at the dealer. When you lease, you don’t have to do any of these things. Upfront, you’ll be required to pay a security deposit, a few taxes and your first monthly payment. When comparing the two, you’ll find that while you do have to pay something to get a lease started, you certainly don’t have to pay as much as you would if you were financing a car to own it.
Tip #4: Save at least $500
When you turn your car in at the end of the lease, most car dealers will charge you what is known as a disposition fee. This generally is about $500. So, if you’re going the leasing route, go ahead and start saving that disposition fee in a separate account. For example, if you have a two-year lease, then start saving $21 a month to start accusing that $500 disposition fee. You’ll find it easier to pay it upfront from your savings then trying to scramble to get the money together when your car is due back at the dealership.
What Are You Waiting For?
Keep these four pro tips in mind as you weigh your options for your next, new car. If it’s true that time is all about money and if you need a car—then now is your chance to save money through a car lease. They are easy to start, effective in helping you save money — and in some cases, if you own your own business, can have a tax benefit for you each year. Contact your local dealer today!