What are the cheapest car leases? Which cars have the lowest lease payments?
Generally, the cheapest cars to lease are those with a low monthly payment created by a low lease price combined with a high residual value, which can depend on car make and model.
Since lease payments depend on the specific type of car being leased, choosing the right car can mean lower payments than for another car of the same price. Leasing is unique in this way.
As you probably already know, leasing provides much lower car payments than buying with a loan — as much as 30%-60% lower per month.
However, unlike loan payments, lease payments actually depend on the make/model of car. Some vehicles makes better leases than others.
The cheapest car lease may not be for the cheapest priced car. Some expensive cars can have lower lease payments than other 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 sticker 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. Monthly payment will be the same as long as the cost is the same.
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 lowest monthly 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.
For a given MSRP sticker price, the car with the highest residual value will have the lowest monthly payment and will make the less expensive lease.
In our example, Honda cars 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 than you could by leasing a Ford.
See our Lease Kit for an average residual value calculator for all car makes and models in three classes, which will help you determine which cars will be have the cheapest leases.
For more details about how car lease payments are calculated, and how residual values are involved, see Car Lease Payment Formula, part of our Lease Guide.
There’s cheap payments, and cheap overall cost, which can be different
Although we’re primarily focusing on lowest monthly payments, there is also the consideration of the lowest cost to get into a lease. Later in this article, we’ll discuss incentive leases from car manufacturers.
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 that can be used as a down payment.
Actually, at the time of this writing, there is a $99/month 36 month lease offer from Mercedes-Benz on its cute little Smart ForTwo . This is the lowest 36-month lease payment we’ve ever seen.
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 for this car — much lower payments than a for a purchase 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 same Honda Accord 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, even if it’s a brand such as Honda that already has high residual values.
At the time of this writing, Honda is offering a special lease deal on the Honda Accord LX of $199, 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 $1800, plus first month’s payment due at signing.
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.
A down payment, or not, doesn’t change whether a lease is a good deal or not. It doesn’t affect the deal at all. It only changes when part of the cost of the lease is paid — either up front as a down payment or later as a higher monthly payment. This is an important fact about car leasing that should be understood.
To see the dramatic difference between promotional leases and normal leases, see our article, Incentive Car Leases – Best Way to Lease.
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 sedan for only $169/month with $1999 due at signing, or $220/month with $0 due at signing. Both are excellent deals — actually the same deal — just different down payment.
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.
Better credit — better lease deals
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 actually have 3 different scores from 3 different credit bureaus, and they can be different values.
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 promotional lease deal
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.
The best and easiest way to find cars that have the lowest current prices and best incentives is by using our free Car Deal Finder. Then compare the deals at Edmunds. Get real dealer price offers from multiple dealers who compete for your business. Go with the best offer and the best deal.
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.
Without a promotional lease deal, you must negotiate your best price for the vehicle you want to lease. The lower the lease price, the lower the monthly payment and overall lease cost.
Most people like to do some research before buying or leasing a car. We highly recommend Edmunds the best and most respected car research and pricing site for deals on new and used cars. Not only can you find prices but you can get features and specs, reviews, test results, safety and reliability ratings, incentives and rebates, payment calculators, trade-in values, and much much more. It’s a one-stop web site for folks who are thinking about a new car.
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 discounts (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 or military personnel.
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.
How to know a good lease deal – free online tool
Even the cheapest car lease deals can be bad deals. If you don’t know to determine if you’re paying too much, you could easily pay more than other people for the same car.
It’s easy enough to pay too much for a lease if you only focus on monthly payments. Because payments are calculated on three major factors — vehicle price, residual value, and money factor — you could be getting a bad deal on any or all of these factors.
It is a mistake to assume a lease is a good deal simply because its payments are less that loan payments for the same car. That is NOT the way to evaluate a car lease.
We provide an easy way to quickly evaluate a lease deal using our free online Lease Deal Calculator. Simply plug in a few numbers and get a rating of the deal. Evaluate deals from car company ads on TV, in the newspaper, or deals that a dealer may offer you. Compare different deals to find the best. Use the evaluation as a basis for negotiating a better deal.
If poor credit is preventing you from leasing
It’s a fact that leasing requires a better credit score than buying with a loan, especially for the special manufacturers’ lease deals mentioned earlier in this article. Therefore leasing a brand new car might not be possible for you.
However, buying a good used car might be the solution. If you’ll need a car loan, credit restrictions are not quite as tight and can get you the low monthly payments you wanted. Look for used car deals in your area with our unique Car Deal Finder tool.
With not-so-great credit, it is very possible to get a car loan from a lender such as CarsDirect and InstantCarLoans.com, for either a brand new car or a used car. Get free quotes and go with the best deal.
Leasing is not for everyone
Leasing is restricted to brand new cars. Even though payments can be low for manufacturers’ special leases, you might not find a deal on exactly the car you want. Therefore, you might want to consider a used car to achieve your objective of a low monthly payment. Our Car Deal Finder tool as well as highly recommended Edmunds is an ideal way to search online for used cars in your area.
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.