Why $199 Leases Aren't Always A Good Deal

By

Senior Pricing Analyst

Alex Bernstein is the Senior Pricing Analyst for CarsDirect.com. Each month he studies immense volumes of pricing and incentives data in search of trends that are useful to car shoppers. In the process, he often breaks industry news stories -- his analyses and insights have been featured on websites such as Automotive News, The Detroit News, Autoblog, The Truth About Cars and The Car Connection.

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, Senior Pricing Analyst - June 7, 2017

Learn about a common mistake of shopping for cheap $199 (and under) leases

Choosing a new car based on monthly payment may sound simple, but it can be a terrible idea when it comes to leasing. $199 (and under) leases sound cheap, but it can be a grim situation if you end up having to pay a ton of money upfront.

Any lease can be a $199 deal with a high enough amount at signing. In fact, based on our analysis this month of 500 leases, some of these so-called deals require as much as $4,629 at signing.

There are even cases in which you could lease a much nicer, more spacious or more interesting vehicle for less when comparing effective lease costs. No one likes finding out they could have gotten more for less, so here's a look at some examples.

Offers are for 2017 model year vehicles in Southern California unless noted otherwise.

GMC Terrain: Brawny But Expensive

GMC Terrain

At $199 for 24 months, the Terrain SLE-1 sounds like a great deal given its MSRP of $28,225. However, it has an amount due at signing of $4,629. As a result, its effective lease cost is $392.

At that price, you could lease a $38,000 Acura RDX and save $1 per month. Or, you could take home a brand-new Nissan Murano S for as much as $61 less per month.

Model Name Effective Cost Difference Per Month MSRP Pmt/Due at Signing/Term
Nissan Murano S FWD $331 -$61 $31,100 $259/$2,599/36
Jeep Cherokee Trailhawk 4x4 $349 -$43 $32,290 $252/$3,499/36
Chevrolet Traverse LT FWD $361 -$31 $34,995 $269/$3,309/36
Chevrolet Equinox LT 2WD (2018) $370 -$22 $27,645 $229/$3,379/24
Acura RDX V6 AWD (2017) $391 -$1 $38,145 $299/$3,299/36

Ford Fiesta: Cheap But Spendy

Ford Fiesta

On the surface, the Fiesta SE Hatchback seems pretty affordable at $189 for 36 months with $1,939 at signing. After all, the car's MSRP is only $17,160. But with an effective cost of $243, this is actually one of the worst deals available.

For the exact same amount, you could actually lease a Honda Civic 1.5T Hatchback. If you were hoping to save money on gas, you could also lease a nearly $25,000 C-Max Hybrid for $18 less. Or, if you're on a tighter budget, the Nissan Sentra ranks as one of the cheapest leases on any car.

Model Name Effective Cost Difference Per Month MSRP Pmt/Due at Signing/Term
Nissan Sentra SV $205 -$38 $20,065 $149/$1,999/36
Ford C-Max Hybrid SE $225 -$18 $24,995 $169/$1,999/36
Subaru Legacy 2.5i Premium $239 -$4 $22,585 $239/$0/36
Hyundai Sonata SE $240 -$3 $22,585 $179/$2,199/36
Honda Civic 1.5T EX Hatchback $243 Same $21,375 $179/$2,299/36

Chevy Cruze: Pricier Than Some SUVs

Chevrolet Cruze

Although we've seen some incredible leases on the Cruze in the past, recent offers have been rather awful. At $179 for 24 months, the Cruze LT Sedan certainly sounds cheap, but it has an amount due at signing of $2,449.

Because of the short lease term, it ends up with an effective cost of $281. You could lease a nearly $28,000 Kia Sorento for about the same amount of money. Or, you could pick a $26,000 Honda Accord Sport for $5 less.

Model Name Effective Cost Difference Per Month MSRP Pmt/Due at Signing/Term
Hyundai Ioniq Hybrid Blue $275 -$6 $26,074 $219/$1,999/36
Toyota RAV4 LE $275 -$6 $26,074 $219/$1,999/36
Subaru Outback 2.5i Standard $277 -$4 $26,520 $229/$1,729/36
Honda Accord Sport $276 -$5 $26,190 $209/$2,399/36
Kia Sorento LX $281 Same $27,795 $209/$2,599/36

See the effective cost of every lease by segment »

, Senior Pricing Analyst

Alex Bernstein is the Senior Pricing Analyst for CarsDirect.com. Each month he studies immense volumes of pricing and incentives data in search of trends that are useful to car shoppers. In the process, he often breaks industry news stories -- his analyses and insights have been featured on websites such as Automotive News, The Detroit News, Autoblog, The Truth About Cars and The Car Connection.

Follow On: Google+ | Website