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Yikes! What kind of personal financial blogger am I talking about leasing a car? I might get burned at the stake for this one! In all seriousness, the math shows in the long run that buying a car is a smarter financial move than leasing one. But, not all situations are long term. Just as renting makes sense for some consumers, leasing a car makes the most sense for some people as well. If you are unsure as to whether buying or leasing a car is right for you,
For those of you certain of leasing, here is your guide to saving money on leased cars.
Table of Contents
3 Tips To Saving Money On Leased Cars
#1. Look For Deals
Looking for a deal for saving money on leased cars should be a no-brainer. But most people overlook the greatest deals. These are usually on vehicles that are coming out with a new model or are at the end of their model life. The dealers want to get the “old” version off their lots and will be more open to offering great deals (the same holds true if you are buying too).
Of course, certain times of year are better for leases as well. This includes the summer as the next year’s model tends to show up on dealer lots in the fall.
And just like when buying a car, use the dealers against each other. Get an offer from one and then see what another dealer has to offer. You may be surprised at how large of a difference there may be between dealers. Depending on how much business a dealer does, they may have more wiggle room.
#2. Put As Little Down As Possible
When buying a car, you want to put a good amount down, if not buy it outright. But this is because you own the car from that point forward. When you lease, you are essentially just borrowing the car. So the more money you put down, the less you have for other things.
It’s akin to renting a house vs. buying it. When you buy, the larger the down payment, the smaller the loan you will have to repay and more you will save on interest. But when you rent, you want to put as little out of pocket as possible because should something unforeseen happen, you are out that money with very little (if any) recourse to get it back.
For example, let’s say you put down $2,500 and then get into an accident and the car is totaled. The leasing company would replace the car, but you are out your $2,500. When you go to get another car, you have to come up with more money.
#3. Negotiate The Price
The third tip for saving money on leased cars is to negotiate the capitalized cost of the car. This is the equivalent of the sales price. Why is this important?
When you lease a car, you are leasing it based on the price of the car. The lower you can get the price, the lower your monthly payment is going to be. In many cases, just getting a drop of 5-7% of the capitalized cost can save you close to $100 on your monthly lease payment.
Bonus Tips!
Even before you head to the dealer to negotiate the terms of a lease, be sure to verify with your insurance company what your premium will be for the car. There is nothing worse than signing on the dotted line and then finding out your insurance premium is going to skyrocket!
Also, be sure to understand the costs of regular maintenance. Some lease deals will include oil changes and such but not all. It’s best to know the cost of maintaining the car just in case you do have to pay for these things.
Final Thots
While leasing isn’t for everyone, it is for some people. Make sure you do your homework to get the best lease deal you can. If you don’t do any of the tips I outline above, you are going to end up paying boatloads more than you need to.
These tips are simple enough and make saving money on a leased car easy. While you may not look forward to negotiating with the dealer, doing so can put you in a much better financial place in the years to come.
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