Cheap Car Leases. Real or Not?

Many visitors to LeaseGuide.com are eager to find a cheap car lease. Most have already considered a new-car purchase and found that initial costs and monthly payments are too much for their budget.

Even good late-model used cars are expensive due to high dealer mark-ups, higher-than-new-car interest rates, and down payment requirements.

Leasing could be the answer because there is generally no down payment needed and monthly payments are 30%-60% lower than for a loan.

However, low payments — when compared to loan payments — doesn't necessarily mean you are getting a good deal. You may be able to get even lower payments if you know how to find and recognize good deals.

Automotive consumers who don't understand leasing end up paying much more for their lease than those who do understand.

Car lease payments will always be lower than loan payments for the same car, but it doesn't mean you always get a good deal. A cheap car lease may only seem cheap unless you know what you're doing.

Importance of getting a good price
If you've already read our Lease Guide, you know that the most important part of getting a cheap car lease is working out a good sale price. This means negotiating good price discounts and applying rebates when available. The lower the vehicle price, the lower the lease payments, the better the deal.

Many first-time leasers don't understand the importance of getting a good sale price. In fact, many don't even realize that price is a factor and end up with a lease based on full sticker price — because the dealer explained that "it is how leases work."

Best car lease deals come from manufacturers
Some of the best lease deals are not those that you negotiate yourself, but the ones that car manufacturers have already set up as limited-time promotional deals. Prices have already been discounted, rebates applied, interest rates (money factor) set low, and lease-end residuals set high. The combination of all of these important lease factors makes for good cheap car leases.

These manufacturer "subvented" deals are the lease deals you want to find — the cheapest lease deals you'll find.

What's the catch?
Typically, only a few makes and models of vehicles will have these special "subvented" deals at any point in time. If you are flexible in which vehicle you want to lease, no problem. If you have certain vehicle preferences, you can wait for a special deal to offered but you'll have no way of knowing in advance if such a deal will ever be offered. Even dealer salespeople are not given advance notice.

“ What you pay for your car loan or lease directly depends on your FICO credit score from all three credit agencies ”

Another "catch" is that you generally must have a good credit score. This is what is meant by the term "well qualified customer" in reference to such deals. Credit scores in the 680-700 range, or higher, are usually required. If you don't know your credit score, you should find out.

Why do car makers offer such good lease deal promotions? Simple. It helps move cars during slow sales periods. In many cases, the manufacturer loses money on the deals but it helps dealers move out old inventory — so they can order new inventory from the manufacturer. The car maker makes money by losing money! Consumers benefit if they take the deals.

Where to find special leases
Look for these special lease deals from car manufacturers in newspaper advertisements and TV commercials. Many of the ads don't mention a specific dealer name. Even if they do, the ads are actually manufacturer-promoted deals.

The ads usually show a specific model vehicle and a monthly lease payment amount, minus sales tax. The small print under the ad specifies the term of the lease, the amount of cash due at lease inception, and possibly other details.

These are usually genuinely good deals — cheap leases. Of course, you could check to make sure by using our Lease Kit's Lease Evaluator calculator.

Who has car lease deals?
Honda frequently promotes some outstanding and cheap lease deals on at least one of their new models throughout the year, usually the EX style. Although a down payment is usually required and the mileage allowance may be only 10,000 miles per year, the monthly payments are incredibly low for such a outstanding car. If you go for one of these deals, make sure you can live with the mileage restrictions and required up-front cash.

Saab, Saturn, and Volvo often have similar promotions. Mercedes occasionally offers lease deals on a model or two, as does Infiniti and BMW. Other manufacturers offer deals as well. Check the "Incentives and Rebates" section of Edmunds.com for the latest national lease incentive programs from all carmakers. Be aware that there may be regional or local programs that aren't shown.

Another source of car lease deals
For a different source of cheap lease deals, look at Swapalease, a company matches up people who want out of their lease with other people who want to pick up a lease at a good deal. Typically, the "seller" wants out of his deal so badly that he offers a cash incentive to the "buyer." With some careful shopping , it may be possible for you to find a short-term lease on a almost-new car that offers low monthly payments, no down payment — and even get cash back. What a deal!

Summary
In summary, cheap car leases are available if you know what to look for. Look for manufacturer-sponsored deals that are heavily advertised in newspapers, magazines, and on TV.

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