We talked about auto leasing in the last post, including the benefits of leasing over buying.
Let us now present some tips on how to get low monthly lease payments.
Getting Low Monthly Payments on your Car Lease
1. Select a cheaper car. We talked about this in our last post. One of the many positive aspects of leasing is that you can lease a vehicle that would otherwise be too expensive to buy. Need a big SUV but don’t have enough cash to actually buy it? You can lease an SUV, and you don’t need to save money for a down payment!
But again, this will all depend on your needs and on your budget. The best thing to do is to assess your financial situation before you decide to lease a new vehicle. Will your present job be enough to support all your monthly expenses, including your lease payments? What is the status of your credit score? With that in mind, our next tip would be..
2. Make sure that your credit report is up to date. It would also be great if your credit score is average or above average. Anything above a FICO score of 700 is okay. If you have bade credit, of course you can still lease a car, but don’t expect that you will qualify for low money factor rates.
If you have bad credit, you should save a little more money for a down payment. You can also ask a co-signer to guarantee the lease or the loan. But there are leasing companies that accept bad credit lease applicants. Again, this will all depend on your needs and on your budget.
3. Does the car have a good residual value? What many buyers don’t know is that the future resale value of the car will play a big part in determining the lease price. In simple words, a car with a high resale value will ultimately be cheaper to lease, even if they have the same base price.If you want a cheaper car lease, you should look into cars that are known to have a higher resale value.
4. Make a down payment. But if you have a good credit score, then you don’t need to make a down payment, because you will surely qualify for $0 down payment lease offers.
Experts say that making a down payment on your car lease is not a wise move, because you won’t get your down payment back when the car gets totaled in an accident. But making at least $1,000 to $2,000 down payment will give you low monthly payments, period.
5. Search for the latest incentives and rebates. If you get a $500 cash rebate on your car lease, you can use this money as an added down payment, thereby reducing your monthly payments. But car dealers won’t simply hand to you rebates and incentives in a silver platter. You will need to be aware of the presence of such offers, and ask the dealer if you can apply those to your car lease.