Best Car Lease Deals

How to find the Best Car Deals
Dissecting the Deal: How to Find the Best Car Lease Deals  
The car buying landscape is changing and more people are leasing rather than buying a new car these days. In fact, one out of every three new cars are leased in America. But how do you spot a good lease deal? How do you make the best car lease deal for you?  

First, getting a great lease deal can depend on the car you choose. You want to lease a car that holds its value. And if you've never leased a car before, the terminology can be confusing when trying to figure out what part of the lease deal is negotiable and what your monthly payment will actually be. However, leasing is just another way of financing a car and, depending on your lifestyle and needs, leasing can be the right choice for you. At the end of the lease, you either buy the car or return the car to the dealership. Some people only lease cars and never purchase one. They go from one new car to another new car every 36 months and they love always having a new vehicle with the latest technology.  

At Lithia Auto Dealers, we have over 215 dealerships from coast-to-coast, and whether you want to purchase a new or used car, or lease one, we have everything you need to make getting a new vehicle easy. First, let's explain how to make the best deal on leasing a car:

Choose your Car

In the world of auto leasing, a car with excellent resale value is known to have a strong "residual value." That means the value of the car that is left when the lease is over is still very high. When you lease a car, you are paying for its depreciation, plus interest, tax, etc. When looking for a car to lease, check to see how the car holds its residual value. After a three-year lease, many cars only have a residual value of 45%. The higher the residual value of a car, the better.  

Currently, Honda leads the way in holding residual value. The Honda Passport and CR-V crossover lead the way in high value right alongside the Honda Accord. In fact, all of Honda's stable of vehicles rank very high. Land Rover is tops in the premium SUV line, while the Lexus RC holds the best value for premium mid-size. BMW takes the lead for premium compact sedan with its 2-series, and the best residual value for a premium sports car is the Porsche 911.  

When it comes to more economical sedans, the Subaru Impreza has a high residual value, and for off-road utility, top honors go to the Jeep Wrangler. If you're interested in pickup trucks, the GMC Sierra holds its value best, followed by the Toyota Tacoma. To find out more, an excellent residual value calculator may be found here

Special Lease Offers

You've seen the TV commercials and Internet ads for incredible deals on leasing. These deals offer a low monthly payment by altering the lease formula. One way this is done is by offering a very low interest rate and that is very good. On the other hand, special deals can sometimes be made by requiring a high down payment at the time of signing the lease deal, or by changing how many miles you can drive in a year before paying more for the lease in fees. You want your lease to include a yearly mileage allowance of 12,000 miles, not less than that. Unless you genuinely only take the car to the grocery store and back a couple of times a week. If you truly can get by with driving only 10,000 miles a year, then maybe "drive-off fees" as they say in lease terminology, may not be a big concern for you.  

Market Value

When searching the Internet for the best price on a new car, auto pricing websites such as Kelley Blue Book can help you find the fair market value sales price for the car you want to lease as well as its invoice price. The invoice price is basically what the dealer paid for the vehicle. This price represents the lowest price you could hope to find. However, keep in mind that you can sometimes find a car for less than the invoice price. This is especially true when auto manufacturers have year-end sales to move cars before the new year vehicles are on the lot. Look for customer cash rebates that can lower the price as well.  

Get a Quote

Once you have a basic target sales price in mind, check our Dealer Locator here at Lithia.com to find the dealer near you. Give your dealer a call or stop by to get a quote on the car you'd like to lease. You can also find special deals on the dealer's website. Ask if your dealer has the car you want in stock. Tell the dealer everything you want on the car, from the color and trim level, to any special accessories. Then ask for their best sale price.  Once you know what you'd pay to purchase the car, it's time to talk about leasing.  

Lease Terms

Let your sales associate know that you have decided to lease the car. Ask for the lease payment based on the sales price that was quoted. Then, make sure to set the terms for your lease. You want a 36-month lease, with 12,000 miles per year and $1,000 in drive-off fees. Also, make sure you find out the interest rate that the lease is based on. The lease rate is called the "lease factor" or "money factor". You can find an online lease calculator to find out how your monthly payment will change depending on the sales price, the lease factor and other terms of the lease. You'll find the Lithia Auto Payment Calculator and a lease-specific calculator here

Accepting the Deal

Once you have your lease documents in hand, check to make sure that your contract matches the agreed-upon sales price and the terms of the lease including the length of the lease, the annual mileage, etc. Also, make sure your contract comes with GAP insurance. GAP stands for Guaranteed Asset Protection insurance and it protects the borrower if the car is totaled by paying the remaining difference between the actual cash value of a vehicle and the balance still owed on the financing. 
If everything is to your liking, sign the documents, give the dealer your drive-off fees, and make sure to call your auto insurance company so that you are covered from the moment you take possession of your new leased car. But remember, you do not own this car. Make sure to have all the required maintenance performed by your Lithia Auto Dealer and take care of the vehicle. You want to avoid any penalties for excess wear and tear, or dings and dents on the car when you turn it in at the end of your lease.  

At Lithia Auto Dealers, your business is important to us. We want you as a customer for life and we'll go the extra mile to always make sure you get the best deal and best service, whether you buy new, used, or lease.