What to Look For When Leasing a Car?
If you are in the beginning stages of researching the car you would like to lease, read this article to learn what to look for when leasing a car.
Low Monthly Payments
What makes a great lease deal is simplified by low monthly payments. Low monthly payments are a result of a high residual value.
High Residual Value
Residual value is a car’s estimated worth at the end of the lease. You want this number to be high because when you lease, you only pay for the vehicle’s depreciation.
The depreciation is the difference between the vehicle’s original value and its residual value, therefore the higher the residual, the less depreciation you will pay. The depreciation is divided by the total lease term in months to determine your base monthly payment.
Vehicle’s with High Residual Value
Unlike buying, leasing a more expensive car can actually have a lower monthly payment than a less expensive vehicle. Luxury brands, like Acura and Lexus, are smart auto leasing options because they are well known for retaining their value. Toyota, Subaru, and Honda have a reputation as non-luxury brands that hold their value as well.
Brand new models also have higher residuals compared to last year’s model. This is why it is common practice to lease new cars rather than used. Used cars have already depreciated, making their end of lease worth significantly lower.
If you already have a car in mind, you can find out its residual by calling the dealership, looking it up on a vehicle valuation site, or you can save yourself the work and get a free quote from D&M Auto Leasing.