Best Lease Deals

What Are the Best Lease Deals This February?

Would you be surprised to learn there’s a way to get a new car about as often as you get a new cell phone? By leasing a new car, you can. If you do it right, you can have an affordable monthly payment, and you won’t have to break the bank with a high down payment. Leasing your next ride can get you cutting-edge safety and infotainment technology without the high cost of buying a new car. Of course, you never actually own the vehicle; it is more like renting it for a few years.

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Last Updated: Feb 05, 2019

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Around three in 10 new cars leaving dealer lots are leased, according to the credit reporting bureau Experian. While leasing was once the domain of luxury car customers and businesses, it now spans the entire automotive market.

Consumers who purchase vehicles are responsible for paying the entire price of the car. They usually do so with a combination of a down payment and an auto loan. Lease customers only have to pay for the amount of depreciation that is expected to occur during the time they have the car, plus interest and fees. Since you’re only paying for a portion of the vehicle’s value, your monthly payments are usually lower than they would be if you bought the same car.

The monthly payments and the amount due at signing can be even lower if you’re able to take advantage of a lease deal at a franchised new-car dealership. When a vehicle isn’t selling as fast as expected or is due for replacement, automakers offer incentives to help the pace of sales. These lease deals lower monthly payments, the amount due at signing, or both.

Although the idea of leasing seems simple, it can be more complicated in practice, especially for people who’ve never done it before.

That’s where the experts at U.S. News & World Report can help. Our articles and advice on leasing will give you the knowledge and confidence you need to score a great lease deal, while helping you know when to walk away from offers that might hurt your wallet. We’ll also help you decide whether to buy or lease, avoid costly leasing mistakes, and find 2019 cars with great residual values. Our step-by-step guide to leasing a new car is a great place to start.

While there are some great lease deals this month on cars late in their life cycle or due for replacement, there are also several great offers on recently redesigned models. Many of the amounts due at signing seem to be climbing compared to what we’ve seen over the last couple of years, but monthly payments remain affordable on the best lease offers.

Although the specific payments differ based on where you live, there are affordable deals across the country on the 2018 Ford Focus sedan, with monthly payments of less than $200. The all-new 2019 Mazda3 is on its way, so there is a good deal on the 2018 Mazda3, with payments of as low as $185 per month.

However, the deals aren’t just reserved for outgoing models. Attractive deals can be found on the recently redesigned 2019 Hyundai Veloster, 2019 Volkswagen Tiguan, and 2019 Subaru Forester. The Forester deal has reasonable monthly payments with little due at signing. Of course, you’ll find a host of luxury models included in this month’s best deals. There are deals to be found on the sporty 2019 Alfa Romeo Giulia sedan, soon-to-be redesigned 2019 Range Rover Evoque, and massive 2019 Infiniti QX80.

Rising interest rates will continue to slowly increase the price of leasing, and several automakers have signaled intentions to reduce the number of leases they offer. If leasing is something you are considering, now would be a good time to get into the market before you have to pay more.

You’ll need to check the fine print of any lease offer to ensure that you qualify for the deal. Many are limited to specific areas and to customers with top-notch credit scores. Our Best Price Program can connect you with local dealers who can help you identify the best deals you can take advantage of.

Unlike most new-car purchase deals, lease incentives are almost always limited to a particular trim level or models with specific option packages. Generally, you want to negotiate the price of the vehicle when you lease. When you get a lease deal, though, you shouldn't be surprised to see the MSRP listed as the price. However, a "cap cost reduction" or low interest rate reduces the monthly payments, the amount due at signing (or a combination of both).

How Do You Lease a Car?

An essential step in getting an awesome lease deal is finding the right car. No matter how good the deal might seem, it's not a great deal unless it's a vehicle that meets your needs. Our new car rankings and reviews can help you see through the clutter and find the perfect ride.

Before you even think about leasing, it’s imperative that you have a reasonable estimate of your annual mileage. Leases have strict mileage caps, and if you exceed the allowable mileage, your inexpensive deal can become costly. Likewise, if you dramatically overestimate your mileage, you'll be paying for miles that you won’t use.

Most lease contract last two or three years, though you can negotiate contracts with different terms. Lease deals, on the other hand, usually have lengths that are strictly defined in the offer terms. When the lease term ends, you just drop the car off at the dealership, pay any final fees, and walk away (or lease another vehicle.)

Lease costs include the depreciation that is predicted to occur during the time that you're driving the car, plus fees and interest (called the "money factor" in the leasing world). Those costs are divided between a down payment you make when the lease starts and equal monthly payments that you make over the rest of the lease term. The amount of depreciation you have to pay for is the difference between the car’s price and its residual value, which is an expert prediction of the car's value at the end of the lease. While the price of the vehicle is generally negotiable (unless it's a lease deal), the residual value rarely is.

It’s easier to understand with an example. We’ll look at a $36,000 sports car to illustrate the numbers. If you can negotiate its price down to $33,000, that becomes its “capitalized cost” in the language of leasing. We’ll say that it has a residual value of $23,000 at the end of the three-year lease term, so you’ll be responsible for paying the $10,000 of depreciation, plus interest and fees. If you pay $2,000 at signing, the remaining $8,000 plus interest and fees will be divided into a series of monthly payments you’ll make over the next three years.

When you purchase a new car, you’re generally required to pay sales tax on the whole cost of the vehicle. However, leasing is not quite as simple. Different jurisdictions have different rules about what you have to pay. In some places, you pay tax on the down payment and monthly payments. In others, you’re required to pay tax on the entire value of the vehicle. Questions about your tax liability are best answered by a tax professional who is familiar with your financial circumstances, and not the dealer’s salesperson.

What Else Do You Need to Know About Leasing?

Vehicle owners don’t have to worry about how many miles they drive their car, though excessive mileage may reduce its value when the time comes to sell it. Lease customers, on the other hand, need to be much more disciplined, so they don’t go over the specific mileage limit spelled out in their contract. If you go over, you’ll have to pay an excess mileage fee for every mile that you’ve exceeded the limit. Those costs typically range from 15 to 50 cents and are specified in the lease paperwork.

You also don't want to be well under the mileage cap. The vehicle's residual value is partly based on the number of miles that are expected on the car at the end of the lease. If you only drive 25,000 miles on a contract that allows 36,000 miles, you've essentially paid for 11,000 miles that you didn't use.

Bottom line: you need to know how much you drive before you think about leasing a vehicle.

When you buy a car, it’s like a blank palette that you can customize to your heart’s content. When you lease, you’re responsible for returning the car in the condition you leased it. You'll have to pay to return it to its original condition if you've altered anything. If you fail to maintain a purchased car, it's your problem. Fail to maintain or beat up your leased car, and you'll pay for the excess wear and tear when you return the vehicle to the dealer.

It is critical that you read the lease paperwork before you sign, as every lease contract has slightly different terms and conditions. While some will include periodic maintenance, others don’t. When you turn the car in, you’ll need to provide proof that the work has been done.

Most lease agreements will require customers to carry GAP insurance to cover their loss if the car is stolen or totaled. Even if the contract doesn’t, it’s foolish to lease a car without it. What you need to know – and what the dealer won’t tell you – is that you don’t have to buy the coverage from them. Before you purchase it, you’ll want to talk to your auto insurer, bank, or credit union to see if they offer the coverage for less than the cost at the dealer.

One of the best benefits of a lease is that you should not have to worry about paying for major repairs. Since the length of the majority of leases falls within most new car warranties, the manufacturer should cover any mechanical failures. However, lessees are responsible for paying for their own fuel and insurance during the contract.

When the lease is up, you’ll simply take the car back to the dealer you leased it from or another franchised dealer from the same brand if that is allowed by your contract. You will be required to pay for any damage to the car, plus any excess wear and mileage charges. Many leases also call for a disposition fee that you’ll be required to pay when you drop the car off.

It’s not unusual to want to buy your vehicle at the end of the lease, but you’ll want to compare its price to similar models available in your market to make sure it’s a good deal. You should not expect to get any money back at the end of the lease, as you have no ownership interest.

Leasing and Credit

The leasing world favors consumers with good credit. While you can lease if you have bad credit, it's more challenging and likely more costly. The best lease deals from manufacturers raise the bar even higher, requiring top-notch credit scores and stable employment histories to qualify for the special offers.

To ensure that you can get the lease that you want, it is a good idea to check your credit report well ahead of starting your car leasing adventure. That way you’ll have time to correct any errors and work to improve areas of weakness.

How Do I Know If It Is a Deal?

Not every lease that is advertised is a great deal. Fortunately, it's pretty easy to compare lease offers by looking at their total cost. It's best if you do the math yourself so that you understand all of the numbers in the contract and ensure that extra fees and expensive add-ons aren’t finding their way into the deal.

Comparing leases based on their monthly payments can lead you to a horrible deal. You need instead to look at the total cost of the lease, including the amount due at signing plus the overall cost of the monthly payments to find the best deal.

To find that total lease cost, multiply the monthly payment by one less than the number of months in the lease term (the first payment is usually included in the amount you pay when you start the lease). Add that total to the amount you have to pay up front (including any fees), to determine the total cost of the lease.

Determining the total cost of a lease makes it easy to compare multiple offers. We’ll show you how with a couple of this month’s lease deals. In some parts of the U.S., Subaru is offering the redesigned 2019 Forester for $265 per month for three years with $1,765 due at signing. We’ll compare it to the offer on the 2019 Volkswagen Tiguan, which is available in some regions with monthly payments of $189 for three years and $3,499 due at signing.

To compute the cost of the Forester, multiply its monthly payment of $265 by 35 (one less than the 36-month term), then add the $1,765 due at signing. It works out to be $11,040 over the three-year term of the lease. The Tiguan will cost $189 multiplied by 35, plus $3,499. That’s $10,114 over its three-year lease. While the Tiguan’s down payment is nearly double the Forester’s, the VW deal gives you overall savings of $926.

Another way to compare leases is to convert the money factor to more familiar annual interest rates. To do so, multiply the money factor by 2,400. If you see a money factor of .00200, for example, multiply it by 2,400 and you’ll see that the interest rate is 4.8 percent. On lease deals, the money factor is fixed, but it is negotiable on other leases.

Though leasing usually is less expensive in the short term than buying, you should also explore our new car deals page before you make a final decision of whether to lease or buy. A special cash back or financing offer may bring the price of the two options closer than you might think. If you’re willing to accept technology that’s just a couple of years old, you might consider a certified preowned car. You can explore manufacturer-subsidized offers on certified used vehicles on our used car deals page.

If you didn’t see your dream car in the list of vehicles above, look at our Acura, BMW, Cadillac, Mercedes-Benz, Porsche, Audi, Toyota, Nissan, Ford, Honda, Chevrolet, Hyundai, Kia, Mazda, Jeep, Dodge, Ram, Buick, GMC, Subaru, Lexus, and Volkswagen deals pages to see brand-specific lease specials.

While we strive to keep the deals listed here up to date, these lease offers can change and may not be available in all areas. The best source of information on current lease deals is your local dealer. Use the link next to the vehicle you’re interested in to contact a dealership near you.

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