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Thursday, June 13, 2024

Auto Lease Advice for the Newbie Car Buyer

Have you thought about auto leasing? This is one one of the most affordable and easy ways to drive the car that you have always wanted. If you think that leasing is only good for small and mediocre automobiles then you will be surprised to know that you can lease a better car for almost the same amount of monthly payments.

Think about this for a second: you will not be paying for the MSRP or the selling price of the car if you choose to lease. Instead, you only need to pay for the use of the car, which is calculated using the MSRP (or dealer invoice) and the estimated resale value. For example, if the car has a dealer invoice of $20,000 and the estimated resale value is $12,000 then the lease price will be around $8,000 before taxes. This amount will be paid in monthly increments, representing your monthly lease payments.

Convinced yet? Remember that your monthly lease payments will be at least 35% lower compared to a normal financing loan. If you choose to lease a cheap car, then your monthly payments will be lower. The other benefits of leasing include:

1. You can drive a new car every two or three years.

2. Low upfront costs, because some lease deals require $0 down payment and $0 security deposit.

3. Vehicle maintenance and vehicle integrity is covered by the warranty. If you feel something wrong with the car, return it to the dealership and they will fix it for you.

4. Get free GAP insurance. GAP insurance will protect your modest investment in the case the car is totaled in an accident.

5. Choose from a wide array of new cars, trucks, and SUV’s. You are never short of choices when it comes to leasing.

Where Do You Begin?

Easy. It all starts in choosing your car. Since the lease price will have something to do with the MSRP and the resale value, you can get a cheap car lease by:

1. Choosing a car that is within your budget. Of course, you can choose a more expensive vehicle but the fact remains that expensive cars will be more expensive to lease.

2. Choosing a car with a high perceived resale value. Most Japanese cars have better resale values compared to American cars, and European marquees generally have better resale values compared to other brands.

It depends on your driving preferences. If you can afford it, you can even lease an expensive luxury car and still get lower monthly payments compared to buying the same car.

Flexibility is one of the key traits of leasing. We will discuss more about leasing in the next post. Start by performing research on the best new cars to easily determine the right car for you.