Cheapest Cars to Lease
Which cars make the cheapest lease deals? Which cars have lowest lease payments?
How to find the cheapest lease deals
As you probably already know, leasing provides much lower car payments than buying with a loan — as much as 30%-60% lower.
However, unlike loan payments, lease payments actually depend on the type of car and a number of other important factors.
The cheapest car lease may not be for the cheapest car. Some more expensive cars can have lower lease payments than some less expensive cars.
Let's explain to see exactly how that works.
What determines low lease payments?
First, let's look at how loan payments work. If we have two different cars (different makes and models) with the same price — say, a Ford and a Honda — and we have a car loan for each, the monthly loan payments will be exactly the same for both cars, assuming same price, same loan terms, same buyer. The type or brand of car doesn't matter when you finance with a loan.
However, leases are different. Given the same two cars as above (Ford and Honda), same price on each and same buyer, monthly lease payments will be different for the two cars.
In fact, lease payments will typically be higher for the Ford than for the Honda. So if you were making your decision based on payments, you would go with the Honda.
Why is that, you might ask?
The reason is that different make/model cars have different lease-end residual values — predicted future resale values. Residual value is one of the four primary factors that determine monthly car lease payment amount. The car with the highest residual value will have the lowest monthly payment and will be the cheapest to lease.
In our example, Honda cars will generally have higher residuals (future resale values) than Fords, which makes Honda the cheapest to lease, even if the cars are the same price.
Stated another way, for the same monthly payment you would generally get more car by leasing a Honda for the same monthly payment.
See our Lease Kit for a table showing residual values for all car makes and models, which will help you determine which cars will be have the cheapest leases.
For more details about how car lease payments are calculated, see Car Lease Payment Formula, part of our Lease Guide.
What is a cheap lease?
Based on emails we receive and other sources, it appears that most people consider a monthly payment of around $200 or less as being an inexpensive lease. Some even look and hope for $100 deals but that is stretching things a bit unless they are willing to make a large down payment — or have a high-value trade-in.
As a point of comparison, let's look first at an average lease for a medium sized sedan such as the Honda Accord LX with automatic transmission priced at $21,555 with a 36 month lease, 12K miles per year, $11,450 residual value, .00299 money factor, and no down payment. All average parameters — no great deal here. With no special price discounts, no special residual value, no special money factor, the monthly lease payment for this Honda will be about $380 not including tax. This would be a "normal" lease — much lower payments than a loan but still nothing special as a lease deal.
Many people looking for low lease payment may not consider this a cheap lease, although it's much cheaper than buying the same car with a loan of the same term. With a loan, this car would require a whopping $667 monthly payment (no down payment, same interest rate, same term).
So, how do I get the cheapest lease?
First, look for promotional deals on the car you're interested in. At the time of this writing, Honda is offering a special lease deal on the Honda Accord LX Coupe of $219, not including tax. That's a great lease deal on this car. The deal is only for this particular model and it expires in 1 month. It also requires a down payment of approximately $2380, plus first month's payment. To get this kind of a low lease payment requires a built-in combination of good price discount, boosted residual value, and reduced money factor. If you don't want to make the down payment, the monthly payment goes up a bit, but it's still the same great deal.
Honda, in particular, frequently offers $0-$0-$0-$0 due-at-signing lease deals. This means you pay no down payment, no security deposit, no tax, and no first month's payment. See Best Car Deals for the most current cheap lease deals being offered by car makers and dealers. At the time of this writing, for example, you could lease a Honda Civic DX-VP sedan for only $139/month with $1999 due at signing, or $170/month with $0 due at signing. Both are excellent deals.
Most lease deals from any manufacturer can be arranged so that no cash is required up front, although it increases the monthly payment. See the following article for details: Zero Down Car Leases.
It may come as no surprise that special promotional lease deals require that the customer be "highly qualified" which means having a good credit score. If you don't know your latest credit score, you should. You can get your latest credit score at FreeCreditScore.com with a simple signup. Dealers and auto finance companies rely on credit scores to determine customers' credit risk. Don't let a dealer know more about you than you know about yourself.
If you can't find a special manufacturer's promotional lease deal on the car you want, you must look for cars with the lowest prices, best discounts and rebates, and highest residual values. Low prices and high residuals, in combination, make the cheapest car leases.
In general, car brands with the highest residuals are Japanese and European. There are exceptions of course. Some European models have lower than average residuals, and some American models have higher than average residuals. Our Lease Kit has average residuals for all car makes and models and shows which cars are best (and worst) to lease.
Exactly which vehicles make the cheapest leases?
Cars with the lowest cost and highest residual values, in general, make the lowest cost leases.
Toyota, Honda and Nissan, for example have low-cost models that also have high residuals — and they (as of this writing) are offering great rebates (which lowers cost even further) — a perfect combination for leasing. The Honda Civic and Honda Fit are good examples.
Let's look at the Toyota Corolla, a small economical 2-door sedan, priced at about $16,000. At the time of this writing, Toyota is offering a special lease deal on this model (and many other models) of $149 a month, 36 months, 36,000 mile allowance. They base this on a heavily discounted price, a high lease-end residual value, and a super-low money factor (equivalent to 0.5% APR interest). Even without the special deal, this car could be leased for about $200/month, depending on down payment, if any.
Other cars in this price range are the Nissan Versa, the Honda Fit, Hyundai Accent GL, Kia Rio, and Kia Soul . All of these cars can produce lease payments in the sub-$200 range with manufacturers' promotional offers. The Honda Fit has the highest residual value and would make the cheapest lease, assuming prices were equal.
For a little more money each month, look at slightly larger cars such as the popular Honda Civic, Toyota Camry, and Nissan Sentra. These all have high residual values and often have promotional lease deals and rebate offers. Some have special rebates for college grads.
Larger cars with high residuals, such as the Chevrolet Camaro, Ford Mustang, and Jeep Wrangler, are also excellent lease vehicles even though monthly payments are higher than for smaller less-expensive vehicles. Again, find a complete list of lease ratings for all vehicle makes and models in the Lease Kit.
Manufacturers' special lease deals
The Best Car Deals web site contains a list of current lease deals on many makes and models — many for less than $200 a month. The deals come from manufacturers who are offering special lease prices, high residuals, and low money factors on certain models. The cheapest car lease deals come from these special promotions. The deals are nearly all genuinely good deals but you should make sure you can live with the terms (usually 36 months), annual mileage limit (usually 10K-12K miles per year), and the down payment, if any.
Automakers' monthly special lease deals are better than any lease deal you could negotiate on your own — because you can only negotiate price, not residual value or money factor. See the Best Car Deals web site for current special lease deals.
Another option for a cheap car lease
There is one other great way to get a cheap car lease — a lease takeover.
Suppose someone recently leased a car, got a good promotional lease deal, made a relatively large down payment, all of which resulted in a low monthly payment. Now, they need to get out of the lease (lost job, got divorced, don't need car any longer) and are offering it on Swapalease to anyone who wants to take it over and assume the low monthly payment.
If you like the car, you can take over the lease and get the benefit of an almost-new car with built-in low monthly payments, with no down payment. The "seller" pays all the costs except a small application and transfer fee that is paid by the "buyer." The seller may also offer a cash incentive. What a deal!
Summary
The cheapest cars to lease are generally those that are lowest priced, have manufacturer incentives, and have the highest lease-end residual values. Look for dealer lease promotions that are backed by the manufacturer, which are usually genuine good deals. The best lease vehicles are those that have higher-than-average residual values, such as many Japanese and European brands, but also include many American models and styles.
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