and cons to leasing, but for many shoppers, leasing
is a more convenient option that minimizes monthly
payments and eliminates many of the headaches
that come with ownership. If you're thinking
about leasing a new car, here are the four keys to
unlocking your monthly payment. The first key is the lease term. Plain and simple, this
is the period of time that you possess and
make payments on the car.
We recommend lease terms
of 36 months or less so your car will always be
protected by the manufacturer's three year warranty. Next is the down payment. The more money down
to start the lease, the less your monthly
payment will be. Most deals can be structured
to accommodate down payments of any amount,
but we recommend putting down as little out
of pocket money as possible-- anywhere between 0 and $1,000.
Keep in mind that you can
also apply a vehicle trade in or manufacture
rebates and incentives toward your down payment. Next, there's mileage. Every lease comes with a
limit for the number of miles you're allowed to drive. Most leases are
capped at anywhere from 10,000 to 15,000
miles per year.
Be honest with yourself
about how many miles you expect to drive. Of course the more miles
you include in your lease, the more it will
cost, but it's cheaper to build them into your
deal now than to worry about overage charges later. Finally, there's
the residual value. This tells you what
your car will be worth at the end of the lease.
The higher your
residual value, the less you need to pay over
the life of your lease. For better or worse, residual
values are non-negotiable. For example, if you
lease a $50,000 car, and its residual value at the
end of a lease is $30,000, then you will pay $20,000 over
the course of the lease term. Once you know your term,
down payment, mileage, and residual value, you can
calculate your monthly lease payment.
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