Best Lease Deals

New-car leasing gets you behind the wheel of a new car with the latest safety, infotainment, and driver convenience features, but without the high price tag of buying a new ride every few years. Once reserved for businesses and luxury car customers, auto leasing has spread to every corner of the market, from the least expensive subcompact cars to the most expensive pickup trucks. Today, about three in 10 new vehicles leaving dealer lots are leased rather than purchased.

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Last Updated: Jul 10, 2019

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In many ways, leasing a car is like renting for an extended period. After the term of the lease is up, you simply return the leased vehicle to the dealership, pay a few closing fees, and walk away.

Car buyers have to pay the entire price of the vehicle and usually take out an auto loan to fund the purchase. Lessees, on the other hand, only pay for the depreciation that is expected throughout the duration of their lease contract, plus interest and fees. Because you only have to pay for a portion of the vehicle’s total value, lease payments are typically much lower than a loan payment would be for the same model.

Taking advantage of an automaker’s special lease deal can mean lower monthly payments, less due when you sign the lease, or both. You can often find generous lease deals on vehicles that are close to the end of their product cycle or ones that aren’t moving off the lots at the pace automakers expect.

While the concept of leasing is simple, the process of choosing, negotiating, and finalizing a lease can be a daunting challenge for consumers who have never leased a new car before. It even has a vocabulary that’s different than the rest of the car-buying world. The team at U.S. News Best Cars is here to help you with the knowledge to confidently pursue a lease. Our articles on deciding whether to buy or lease, strategies to avoid expensive leasing errors, and our step-by-step guide on how to lease will guide you through a successful new car leasing experience.

What Are the Best Lease Deals This July?

After years of sales growth, the auto industry has hit a plateau. That has left many dealers with too many cars on their lots, which is problematic with fall model introductions around the corner. Their sales challenges can be an opportunity for you to take advantage of a great lease deal.

There are many affordable leases available this July with payments between $200 and $250 per month and a couple thousand dollars due at signing. The 2019 Chevrolet Equinox, 2019 Mazda CX-3, and 2019 Honda Accord all have offers in that range. For even less, you can get a lease on a 2019 Kia Forte or a freshly redesigned 2020 Toyota Corolla. There is a generous lease offer on the 2019 Subaru Outback, as the company prepares to replace it with a fully redesigned model for 2020.

For a bit more, you can get behind the wheel of a 2019 Genesis G70. Our top-ranked luxury small car and the North American Car of the Year, the G70 is available in many parts of the country for just $299 per month. The popular 2019 Lexus RX 350 is available with monthly payments below $400 per month.

Not all lease offers are available everywhere or on all models of a specific car. Many are restricted to customers who live in a certain area. Unlike car purchase deals, new vehicle lease deals are almost always limited to cars with precise trim levels and option packages. While leasing generally favors customers with good credit, lease specials frequently raise the bar even higher; only consumers with top-notch credit qualify for the best offers.

Our Best Price Program can connect you with dealers who can help you identify the best offers you can take advantage of.

You normally want to negotiate the price that your lease is based on (its capitalized cost, in leasing terms). Though with lease deals, you should not be surprised to see the sticker price listed on your documents, with a "cap cost reduction" to bring it down.

How Do You Lease a Car?

Just like when you purchase and finance a car, the first step in leasing is finding a vehicle that meets your needs and fits your budget. Simply put, it doesn't matter how great the deal is if you are not getting a great car. Our new car rankings and reviews will guide you on the path to finding the right ride.

Not only do you have to know your budget before you lease, but you also need to have a good idea how much you drive each year. All leases have strict mileage caps and will become very expensive if you go over the limit. You also don't want to be way under your threshold. The cost of the expected mileage is built into the lease, so you don't want to pay for miles you don't use.

Usually when you lease, you can negotiate the vehicle cost, the mileage cap, the length of the lease, and other lease components. When you get a special lease deal, most of the terms are set in stone, with no room for negotiation. By accepting those terms, you're likely getting a lower price than if you were negotiating the lease with the dealer.

Costs that are priced into the lease include the amount of depreciation that is expected to occur while you have the vehicle, along with interest and fees. When the contract is over, you drop the car back off at the dealership and pay for any excess mileage, wear, or other closing costs.

The amount of depreciation is determined by subtracting the vehicle’s expected value, called its residual value, from its capitalized cost, or price. The residual value is an expert’s opinion of the car’s future value and is generally not negotiable. The depreciation, plus interest and fees, is then divided between an amount due at signing and the remainder is split into a series of monthly payments.

To illustrate, we'll use an SUV with an MSRP of $40,000, which is expected to be worth $25,000 at the end of a three-year lease. As a lessee, you'll have to cover the $15,000 in expected depreciation, plus some interest (money factor) and fees. If $3,000 is due at lease signing, the remainder ($12,000 plus interest and fees) is divided into a series of 36 equal monthly payments.

To convert the money factor to a more easily comparable interest rate, multiply it by 2,400. If the money factor is .0025, you can multiply it by 2,400 to see that it is equivalent to an interest rate of 6 percent.

The amount you pay in sales tax can have a significant effect on your decision to lease or buy. In many jurisdictions, you only have to pay sales tax on the amount you spend up front and on the monthly payments. When you buy a car, you have to pay tax on its entire value. If you are unclear about the tax implications of leasing a car, you should check with your financial advisor or accountant, rather than relying on the knowledge of a car salesperson.

What Else Do You Need to Know About Leasing?

As we touched on before, having a reasonable estimate of your annual mileage is essential before you even think about leasing. If you own a car, you can drive as few or as many miles as you want with no consequences. If you go over the mileage cap on a lease, you can expect to pay between 15 and 50 cents for every mile you drive. That money has to be paid to the dealer at the end of the lease.

Overestimating the number of miles that you drive also has financial implications. If you have a lease with a cap of 36,000 miles, those miles are figured into the amount of depreciation that is expected during the contract. If you only drive 20,000 of the allowed 36,000 miles, you have essentially paid for the depreciation on 16,000 miles that you didn't drive. You can avoid the over-or-under mileage situations by having a good idea of your mileage before you consider leasing a vehicle.

If you own your car, you can customize it as much as you want. The same isn't true when you lease. You are expected to return the car in the exact condition it left the showroom, with only reasonable wear and tear. Even if you think your modifications add value to the car, you'll have to remove them before you return it, or you’ll face the cost of having the dealership return it to showroom condition. Dealerships also expect records from lease customers so that they know that the car has been appropriately maintained. Some lease offers include periodic maintenance, while others require you to pay for it yourself.

Every lease is different, so it is imperative that you read the documents before you sign them. Pay particular attention to the sales price (capitalized cost), money factor, term, payment, and mileage cap. Some leases require you to pay a security deposit at signing. The security deposit goes toward any damage or excess mileage charges due when you return the vehicle at the end of the lease.

If you see anything that is incorrect or doesn’t match the deal you agreed to, don’t sign the documents.

Nearly all lease agreements require lessees to have GAP insurance to cover their loss if the vehicle is totaled or stolen. Even if it’s not required by the lease, it’s a great idea to have it. You should shop for GAP coverage before you head for the dealer, as you don’t have to buy it there. Most car insurers will sell you GAP coverage, as will many banks and credit unions, whether or not you have any financing with them.

A top benefit of leasing is that you usually don't have to worry about costly repairs. Most lease contracts are shorter than vehicle warranties, so the manufacturer should cover any major issues with the vehicle. Some leases even include basic maintenance. Of course, lessees are responsible for buying their own fuel and auto insurance.

At the end of the lease, you’ll take the car back to the dealership you got it from, or another of the brand’s franchised dealerships if the lease contract allows it. You’ll have to pay excess mileage charges, along with fees for excess wear and costs to repair any damage. If you paid a security deposit, these costs will be deducted from that amount. Some leases have a disposition fee that you pay when you return the car, which some brands waive if you sign another lease with the automaker.

It’s common for lessees to buy their vehicles at the end of the contract, but you’ll want to treat it like any other used car purchase and compare its sale price with the price of similar cars in the marketplace to ensure that you’re getting a good deal. Since you have no ownership interest in the car, you should not expect to get any money back at the end of the lease to put toward your next vehicle.

Leasing and Credit

If you plan to lease, you're going to need good credit. For a manufacturer-subsidized lease deal, it needs to be stellar. You will also need to show a stable employment history that assures the leasing company that you will make your payments. It's possible to lease with bad credit, but it's more costly and challenging than if your credit is good.

It is a good idea to check your credit reports for errors and negative information well before you start looking at vehicles. It takes time to correct mistakes and build your score, so the earlier you start, the more chance you have of having a higher score when the time comes to lease. The worst time to find out about an issue with your credit is when you’re sitting in a dealer’s finance office.

How Do I Know If It Is a Deal?

Naturally, not every offer advertised is a good deal. Many consumers don’t look beyond the monthly payment to compare offers, but that’s a potentially costly leasing error. Instead, look at the total cost of the lease, including all payments and the amount due at signing. It's a good idea to do the simple math yourself so that you understand the numbers and ensure that no costly add-ons have wormed their way into the deal.

To determine the total cost of a lease, multiply the monthly payment by one less than the number of months in the lease term. You subtract one because the first payment is usually included in the amount due when you sign the lease. Add the total of the payments to the amount you have to pay up front (including fees), and you have the total cost of the contract.

Calculating the total cost of each lease deal you’re considering makes it easy to compare offers. We’ll use a couple of this month’s advertised three-year lease deals to show you how. The 2019 Acura MDX with all-wheel drive has a three-year lease that requires $409 per month with $2,999 due at signing. The 2019 Lexus RX 350 with all-wheel drive is available in parts of the Northeast and mid-Atlantic for $389 per month and calls for $3,999 upfront. Both offers allow 30,000 miles to be driven during the lease before excess mileage charges accrue.

To determine the total cost of the MDX deal, we’ll multiply $409 by 35 (one less than the 36-month duration of the lease) and then add the $2,999 due at signing. The total works out to $17,314. The total cost of the RX 350 deal is $389 multiplied by 35, plus $3,999, which comes to $17,614. Despite having significantly different payments and amounts due up front, the total cost of the Lexus luxury SUV lease is only $300 more than the Acura.

Of course, when comparing leases, you’ll also want to budget for taxes and the differing costs of auto insurance between vehicles.

Leasing is usually less expensive than purchasing, at least in the short term. If you are considering a longer-term commitment, you should explore our car deals page before making your final lease-versus buy decision. Some generous financing or cash back offers can bring the total cost of buying closer to that of leasing than you might think.

If having the latest and greatest technology isn’t paramount to your vehicle choice, you might consider a certified pre-owned car (CPO car), which gives you the benefits of car ownership at a much lower cost than purchasing a new car. Our used car deals page shows the best offers on CPO cars offered by automakers.

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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