Leasing Deals Are Hot Right Now

Chevy Cruze lease: 24 months, $159/mo., $1,879 down, 12,000 miles/year. Good deal?

Why would you buy (rather than lease) something that depreciates as fast as most automobiles? I have never understood the extraordinary need, often a compulsion, that Americans have to own things.

It used to make sense in the housing market, when everyone thought prices would rise forever. We know how that turned out.

The only sensible reason to own a car is the need to drive it more than 15,000 miles a year (the limit in most leases, and overage charges are steep). Or if it has an especially low depreciation rate (i.e., high quality) and you plan to keep it a long time. Or if you got a very attractive deal on a used car. Our listings can lead you to some.

Used car prices are high right now in part because new-car prices just keep rising. Leasing can help beat the high cost of driving, because basically, you pay only for the portion of the car’s lifetime cost that you use. Of course, there are advantages and disadvantages. You need more than ever to be a smart buyer, and there is some good advice here and an explanation of leasing terms here.

We found some very attractive current lease deals, which we’ll pass along, plus a few that are kind of ridiculous.

We’ll do the ridiculous ones first. CNNMoney cites “10 best spring auto lease deals” and leads off with one for the Ford Explorer XLT FWD: 24 months, $329 a month, $3,748 down payment (!) and a mileage limit of 10,500 miles a year. The article lists several Ford cars, all with 10,500-mile limits. These leases are presumably for old ladies in wheelchairs who have a lot of spare change (for the down payment) lying around.

Two Buicks are on the CNN list, with reasonable monthlies, low down payments and 15,000-mile limits.

There are some quite amazing lease offers listed here: for instance, a 2012 Hyundai Elantra for 36 months, $179/month, $1,999 down, 12,000 miles/yr. Or a 2012 FIAT Pop for 42 months, $199/mo., no d.p., and (I think) 12,000 miles/yr. Offers good through the end of May.

BMW has some great lease offers for most of its line: You can lease the 328i sedan for 36 months, $439/mo., and $2,750 down, with four years of free maintenance and no mileage limit indicated.

Instead of putting money into straight buyer incentives, which are declining, it appears carmakers are trying to encourage leasing as an alternative.

Also, you should note that most lease terms are negotiable: To get a lower monthly rate, you have to put more money down or accept a higher buy-back (residual) value. At a dealership, always negotiate the list price of the car before you ever discuss leasing.

Have you had good (or bad) experiences leasing a car?

—jgoods

Find Used Cars in Your Area at CarGurus

Used Ford Explorer
Used Hyundai Elantra
Used FIAT 500
Used BMW 3 Series

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  1. Randy
    | #1

    When you lease, you’re basically paying for the depreciation during your lease term plus a modest profit for the lessor. If the lessor makes a mistake on what they think the residual will be at turn-in (as they did when fuel costs spiked in 2008 and you couldn’t give away a used truck) they’ll take a loss, but generally they’re pretty good at figuring the residual. So in looking a current leases, with the strong used car market, I think the leases are a bit steep. Now that I’m retired, we tend to keep cars (have a 1999, 2006 and a new 2012) so buying makes more sense. I’m not really sure which (lease or buy) has a better effect on your credit rating.

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