Cheap Car Leasing Options

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November 9, 2016

Get answers to common questions on how car leasing works. Learn about car leasing with maintenance, zero down, and other cheap car leasing options.

Cheap car leasing options range from leasing a low-cost economy car to assuming a car lease from a current lessee. A cheap car lease can help you get into a new vehicle with little down payment, provided you have a good to excellent credit history. If it is important that you lease a brand new vehicle, consider low-cost leases from Asian manufacturers like Hyundai, Honda and Toyota. Provided you are flexible with lease length and mileage per year, you can lease a new vehicle from one of these manufacturers for well under $200 per month with minimal money down.

If you require a very specific vehicle or are looking for a product that is no longer available, you consider a lease assumption. In a lease assumption, you take over payments for a lessee who is looking to reassign their lease. In most states, you must qualify for credit approval as if you were the original lessee. The original lessee then fully transfers the lease for the remainder of the term. Your name will be the only one on the lease agreement. You become solely responsible for all monthly payments and the lease-end disposition fee due upon return of the vehicle. Depending on the type of lease you assume, you may also be responsible for a transfer fee to reassign the contract. Popular websites like LeaseTrader and SwapALease can match you with lessees who are looking to reassign their leased vehicles for a variety of reasons.

In any case, choosing a low-cost lease or a lease assumption will help you get a cheap car lease that can provide you with great transportation and a great monthly payment.

Lease Price
The most important aspect to finding the best car leasing offer or deal is to negotiate the lowest lease price (cap cost) possible. This will be the only area the dealer has any control. There always is some wiggle room; some dealer-supplied incentives along with discounts and rebates the manufacturer can offer that will reduce the price of any leased vehicle.

Residual Value
Certain types of leased vehicles offer a higher residual value than others. The residual value is a percentage of the Manufacturer's Suggested Retail Price (MSRP) or sticker price. The higher the residual value, the better the deal. Most imported cars--other than economy types--offer higher residual value than many American-made vehicles. If a car carries a 60 percent residual value compared to a similar vehicle carrying a 45 percent residual value, than that vehicle offers a better car leasing deal.

Other Factors
A low money factor also adds to a good lease deal. Always check all other deal fees such as bank acquisitions and document filings. Although they may be small, knowing what you have to work with can show which deals are less attractive than the others. You also need to keep in mind insurance costs.

Combined Information
Check all the above information in combination to determine if you have the best car leasing deal available. Make sure you compare the proverbial apples to apples. For example, the car you select may have a very attractive residual value but not so good a lease price. This doesn't make it a bad deal since the high end-of lease residual value will more than likely result in lower monthly payments and possible lower insurance costs.

Related Questions and Answers

Will High Mileage Car Leasing Have a Higher Interest Rate?

For those people who don't want to pay the high monthly payments of a purchase loan, but need higher mileage limits than a standard lease, high mileage car leasing may be your best option. Most leases allow in the area of 15,000 miles per year. For a few dollars more per month, you can obtain a limit increase of up to 25,000 miles per year in some cases. There won't be an increase in the interest charged over the length of the lease. You will pay up front for the extra miles you will drive, instead of paying the over the limit fine that you will incur for going over the mileage limits of a standard lease.

How Good Does My Credit Have to Be for a Zero Down Car Lease?

A zero down car lease is possible for most car buyers these days. Since you're only paying for the cost of depreciation over the period of the lease, you don't have to worry about paying off the whole value of the car. If you can negotiate a favorable initial price for the lease, called the capitalized cost, you shouldn't have any problem negotiating a zero down lease. People with credit scores in the 500 range should be able to negotiate zero down leases. However, you may be asked to pay a higher money factor, or interest rate. The money factor is also sometimes called the rental fee portion of the lease.

Do All Car Leasing Contracts Come with Free Maintenance Plans?

Car leasing with maintenance built into the lease is becoming more popular recently. This is something stemmed from financial institutions who began offering lease contracts a few years ago, and it has only gotten bigger as time went on. Not all lease contracts have built-in maintenance plans, though. In most cases, you will need to ask the person you are working the lease with to add the maintenance plan to your lease contract, and expect to pay more every month for the freedom of not having to pay for regularly scheduled maintenance items. However, you will have to take the car to approved service centers to obtain the maintenance.

Are Sports Car Leasing Rates Generally Higher than Most Other Vehicles?

If you're the type that can't see yourself driving a sedan, then you might be wanting to look into sports car leasing. Leasing is a type of purchase/rental wherein you have possession of the car for a specified period of time, and you make payments on the car during that time. After the time frame is up, you either have the option of buying the car at a reduced price, or returning the car to the leasing company. The payments you make during the lease period will cover depreciation, a small interest rate, plus basically a rental fee. Right now lease rates are low for all cars, and sports cars are no exception. Lease rates for sports cars are similar to those for sedans.

What is the Penalty for Breaking a Car Leasing Contract?

Car leasing contracts are written for specific amounts of time, such as 36 or 48 months. In the past, these were written in stone and couldn't be broken without incurring heavy early termination penalties from the lease provider. However, with more people wanting out of leases before the end of the lease contract, there are a number of companies that will help you transfer a lease. These companies essentially act as brokers for people looking to get into and out of lease without incurring a penalty. Both parties will have to pay a small fee to the broker, however.


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