Year end lease tips

One big mistake avoid when leasing at year-end plus three ways to lower your payment

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Year end lease tips

Leasing a vehicle in December poses one unusual choice.  There may be two model years of the same vehicle to choose from.  In fact, it is possible that the cars could be identical except for the model year.  The conventional wisdom might be that the older model year car, say a 2014, would be the less expensive to lease.  This is logical since the 2015 is almost sure to have a higher MSRP.  The dealer may also be trying hard to move the older models and offer some extra money off the cap-cost.  However, Swapalease warns shoppers to set aside the assumption and negotiate the best deal they can get on both to see which actually does cost less.

Lease tips

One of the most important factors in any lease is the residual value.  The residual value is the value of the vehicle at the end of the lease.  A higher residual means a lower cost to lease since the lessee only pays for the difference between the capital cost (cap-cost) and the residual.  Newer model years have higher residuals.  According to Swapalease’s analysis, newer model year cars are often lower in price to lease when compared to new cars of the leftover model year.

There are also three simple ways that you can reduce the lease costs on any vehicle you hope to take home.  First, remember that nothing is set in stone.  The car’s cap-cost is negotiable.  You should haggle to reduce that as if you were buying a new car.  Second, the mileage you pay for up-front matters.  Opt for paying for the lowest mileage you think you will need.  You may end up buying the car at lease-end (or swapping the lease).  Finally, your credit score will partly determine your “money-factor” or interest rate you will be paying on the lease.  Always maintain your credit to the best of your ability.  It makes good sense for all of your home economics, but particularly when you shop for cars.