Is Your Lease Deal Too Good To Be True?

There are undoubtedly cheap lease deals that can save you money on a new car or truck. But is the price you're seeing too good to be true? Here's a look at some possible signs that the lease deal you think you're getting might be too good to be true, with inside tips on what to look for to avoid being taken for a ride.

Limited availability. If you see a killer price in your local newspaper, you may notice that the fine print says "1 at this price." If that ends up being the case, your choices could be extremely limited. These types of dealer lease deals may get you on their lot, but your ability to score the deal may vary based on inventory.

The down payment is high. Low payments may sound great, but they can distract you from a huge amount due at signing. For example, the RAM 1500 Classic is advertised at $185/month here in California but involves $3,965 at signing. On the extreme end, Mercedes S-Class leases require over $10,000 at signing.

The MSRP doesn't match. Different sticker prices can be a red flag. If the dealer's price doesn't appear to include the mandatory destination charge or the options that you want, you may want to find out why. In Mercedes-Benz's case, advertised leases typically include the often-chosen Premium Package plus destination.

If the listed MSRP is lower than what you expect, there's probably a good reason. For example, most Subaru WRX lease deals advertised by the manufacturer feature the base model with manual transmission. If you want a better-equipped trim with the optional CVT, you'll probably end up paying a higher price as a result.

Shorter mileage allowances. The pandemic caused a slew of auto manufacturers to introduce lower mileage allowances on leases. When it comes to BMW, a switch to 7,500-mile-per-year leases resulted in lower monthly payments. The downside is that you may be getting less for your money versus competitors.

Different lease terms. You'll generally find 24 to 36-month lease deals. However, some brands may offer 48 or even 60-month leases. Residual values will likely vary depending on the term, and there may be a "sweet spot" that gets you the most for your money. Be sure to explore your choices based on your needs.

If the deal you found is really too good to be true, your local dealer may have a hard time honoring the price. Although an inventory shortage has taken away a significant amount of leverage for buyers and led to higher car prices, it's still important to make an informed decision so you can get the best deal possible.

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