Determine if Auto Leasing is Right For You –Part 5
You are reading part 5 of the series on how to determine if auto leasing is right for you.
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Category 5: The Cost of the Lease
Have you heard of $0 down lease deals? These are the type of lease offers that will let you drive away in a new car, without spending a cent for a down payment. Of course, you will still have to settle other fees associated with the transaction, but a $0 down lease offer is best for those who need a new car fast.
The reason why leasing companies and car dealers are able to offer a $0 down lease is because of one thing: the cost of the lease. You can expect to spend less on a new car if you choose to lease.
Why? Because the lease price is based not on the price of the car alone: car dealers also consider the residual value of the car. The residual or resale value is an estimate on how much the car will be worth at lease end.
But remember, the MSRP or selling price will still be considered when calculating the lease price. The point is that if car A has a higher residual value than car B, then car A will most likely be cheaper to lease than car B.
For example, if you want to buy a car that is worth $23,000 then you will need to settle the amount in full, either in cash or through monthly financing.
If you want to lease the car, you will not pay for the entire $23,000. Instead, it will be the difference between the selling price and the residual value. If the car mentioned in the example has a residual value of $11,000 after the lease expires, then the total lease price will be $12,000 before taxes.
See the difference between buying and leasing?
The lease price will always be lower than the selling price, and is also the reason why you can lease a car with $0 down. For a 36-month lease term, the lease price of $12,000 is equal to $333/month.
If you want to make a down payment, then you can enjoy lower monthly lease payments. The flexibility of leasing makes it ideal for any type of car buyer.
Find all the latest lease prices, along with secret leasing deals in your zip code by requesting a free lease quote.
Leasing is fun, simple, and easy. Try a free lease quote today.
