Blog

When it comes to leasing, it is not a perfect fit for everyone. First and foremost a lease is much more complicated than simply buying outright or financing a car. There are many more variables involved in the process. Your broker should be able to help you navigate all the nuances associated with the lease. In fact, you may want one car but you may find out that a different, more expensive car may be the cheaper one to lease.

Many people lease because they want a new car for low monthly payments. Naturally people think that a cheaper car means cheaper monthly payments on a lease. This may be the way things work while dealing with other methods of payment for a car, it is not always the same for leasing.

The way leasing works is the resale value of the car is subtracted from the sale price of the car and that becomes the base for your monthly payments. For example a car has a sale value of $45,000 and a resale value of $25,000. If the lease would be for 36 months, the lease would be around $555 a month, not counting other costs like fees, interest rates and taxes.

Some cars with the same sale price may have very different resale values, therefore altering your lease by a lot. Cars that are more expensive often have a higher resale value, creating a lower monthly payment. For example, CarsDirect.com released a list of The Worst Cars To Lease Right Now. On this list is the Nissan Armada SV. This car’s sale price $45,995 and can be had for an effective lease cost of $766. For almost $50 less a month you can lease a 2017 Mercedes-Benz GLE350 Premium. This car’s sale price is $56,825 a bit shy of $11,000 more and can be had for an effective lease cost of only $723. Those prices include all the extra fees, interest rates and taxes, and yet the Mercedes still comes out as the cheaper option to lease!

All in all, when considering your next automotive purchase call 212.400.CARS