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Best Car Lease. How to Find Good Lease Deals |
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It's not difficult to find great car lease deals — if you know where to find them and can recognize a good deal when you see it. Although selecting a particular car make and model is a personal matter, your choice can make a big difference when leasing. The best lease deals come with those vehicles that have high lease-end residual value, low money factor (lease rate), and low lease price. Let's explain further. A high lease-end residual value is part of a good lease deal. Residuals are typically expressed as a percentage of MSRP (sticker price). A vehicle with a 60% residual percentage will usually be a better lease deal than a similar vehicle with a 45% residual percentage. Some automobile makes and models have higher comparative residuals that other makes and models. Generally speaking, most models of Acura, Lexus, Honda, Toyota, BMW, Mercedes, and Porsche have significantly higher residuals than most models of Chevrolet, Ford, Dodge, Chrysler, Kia, and Hyundai. Money factor also plays a part in lease deals. Money factor is related to interest rate and can be converted to APR by multiplying by 2400. For example, a money factor of .00220 is the same as 5.28% APR. Any rate that is lower than the average national new-car interest rate (see Bankrate.com) is a good rate, and contributes to a good lease deal.
Finally, a discounted lease price also contributes to a good deal. Dealers can only contribute so much to a discounted price, but if the car manufacturer also kicks in with rebates and other incentives, all the better. If you can get a price that comes close to dealer invoice price (see Edmunds.com), you have a good deal. In summary, the best lease deals are those for which the car manufacturer offers a "subvented" deal, in which he offers a combination of discounted price, low money factor, and high residual value. These deals are genuine and designed to offer a relatively low monthly payment that will get the attention of potential customers. We frequently see these limited-time lease deals advertised by a car maker on television or in newspaper advertisements without dealer names. The car makers frequently lose money on these deals, hoping to be more competitive and sell more cars. Customers benefit, if the deal is on the right vehicle for their needs. For more details on how to understand promotional lease deals, see our article, Understanding Car Lease Ads and Commercials." If you find a lease deal you might be interested in, just make sure you read the fine print and that you can live with any required conditions, such as for low annual miles limits, relatively large down payment, and a longer than normal term (lease months). Also be aware that you generally must have an excellent credit score to get the deal. This is what is meant by "only available to highly qualified customers" in the small print of advertisements for such deals. Without the help of promotional "subvented" lease deals from car manufacturers, your deal might not be as good. Since a dealer has no control over money factor (lease rate) and residual values, the only element left for you to negotiate is lease price., You can ask your dealer if he has alternative lease sources, such as large national banks like Chase or Wells Fargo, that might offer better rates. This is more likely to work out if you are leasing a high-end luxury vehicle. You can also shop around at other dealers, although if you go to dealers selling the same brand vehicles, they are very likely to be using the same lease finance companies and banks, who have the same rates. It's worth a try, however. For a different source
of good lease deals, look at Swapalease
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