Here's How $0 Down Leases Can Be A Bad Deal

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Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

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, Senior Pricing Analyst - December 14, 2020

Although it can be tempting to think that every $0 down lease is a good deal, this isn't always the case. While incentives like this can seem alluring with promises of $0 down with no first month's payment, there can be some important downsides as well as opportunities for consumers to get a nicer vehicle for less money.

For example, the 2020 Volkswagen GTI S is listed at $399 for 39 months with a $0-down Sign & Drive lease here in California. That's based on 10,000 miles per year of driving and an MSRP of $29,395. However, a closer look reveals that the much pricier 2020 Arteon 2.0T S has the exact same monthly payment.

Considering the fact that the Arteon has an MSRP of $35,995, this essentially translates to a free upgrade. Alternatively, the 2021 Genesis G70 2.0T is $10 month less expensive ($389 for 36 months, $0 down) and ranks among the cheapst leases on a luxury car. On paper, the G70's MSRP is over $7,600 higher than the GTI.

According to a dealer incentive bulletin, the G70 benefits from at least $5,000 in factory lease cash and a rate equivalent to 1.9% APR. The GTI sits at just over 2% with no lease cash whatsoever. Here, shoppers looking for a sporty car have multiple options for spending less cash to drive home a car that's more expensive.

Meanwhile, Lincoln is touting its Wish List Sales Event. In the case of the 2020 Lincoln Corsair, the featured deal on the base trim is $468 for 36 months with $0 down. However, you could spend less money to lease a 2021 Lexus NX 300. Here in California, it's listed at $349 for 36 months with $2,999 at signing, or $432/month.

In terms of the MSRP, the NX is over $3,500 more expensive. However, better incentives can make it up to $36/month cheaper to lease. Lexus is also offering to knock up to $700 off your first month's payment with its December To Remember Sales Event. This is yet another case in which upgrading can be surprisingly affordable.

Year-end deals abound at the moment. However, just because a lease is labeled "Sign & Drive" doesn't automatically make it a good deal. Just like any other lease, shoppers will still need to compare prices and weigh the pros & cons accordingly. If you play your cards right, doing so can help you get the best car for the best price.

In addition to CarsDirect's top picks among $0 down leases, you can also find a comprehensive list of over 300 leases that can be sorted based on factors like monthly payment, the amount due at signing, effective monthly cost, etc.

Explore This Month's Best Lease Deals »

, Senior Pricing Analyst

As CarsDirect’s resident pricing analyst, Alex offers must-know analysis of pricing & incentives to those looking to buy or lease a car. His consumer-oriented coverage of the latest trends and breaking news has been featured in publications such as Car and Driver, Motor Trend, Automobile Magazine and Autoblog.

Follow On: Twitter

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