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How to Lease a Car

Nov. 27, 2016
Auto Loans, Loans
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There are different strategies for leasing a new car. Here, we outline a streamlined approach that simplifies the process while still getting you a good lease deal.

The strategy assumes that:

  • You have no intention of buying the car at the end of the lease.
  • You know what car you want.
  • You have good credit.

If these things apply to you, you’re ready to get started. If not, you can try a leasing strategy that involves more research.

And if you’re still weighing whether leasing is right for you, ask yourself these seven questions on whether to buy or lease a car.

Shop remotely

Since you already know what car you want, there is no need to go to the dealership. Instead, speed up your search by going through the internet department, a separate sales group within the dealership. Internet sales managers often offer attractive upfront pricing and communicate with customers by email, phone and even text messaging.

Let the market compete for your business

When an internet manager knows you are contacting multiple dealerships for a price, he knows his price has to be competitive to earn your business. Here’s a fun fact: Internet managers create email accounts under aliases and then request quotes from their competitors. Now they can quote you a price that matches or beats other nearby dealers.

Set your terms

Remember how math teachers gave you three numbers in an equation and asked you to calculate the missing number? You are about to do a variation of that exercise as you search for your best lease deal. You are going to give the dealer three numbers and ask him or her to give you the fourth, which is the monthly payment.

You will be asking the internet manager for a lease quote based on these three numbers:

  • Term: Ask for a 36-month (3-year) lease.
  • Drive-off fees: about $1,000.
  • Miles: 12,000 miles a year, 36,000 miles total.

Request lease quotes

Now it’s time to contact the internet department of at least three dealerships but no more than five at once. Either send an email or text, or simply call the internet manager. Say something like this: “I want a 3-year lease on a 2016 Honda Accord EX. I’d like to pay about $1,000 in drive-off fees and drive 12,000 miles a year. Please give me a lease payment that includes all taxes and fees.”

Asking to include taxes and fees is important. Often, dealers will throw out a low-seeming payment, only to tell you later that sales tax and registration fees weren’t included.

Pro tip: If you send out a volley of requests for quotes, consider creating an email account just for car shopping to avoid a future avalanche of spam. Also, turn off your cell phone for an hour or so. Then, listen to all the messages and review all the quotes before moving forward.

Compare quotes

As you review the quotes, keep in mind that some prices might be for more expensively optioned cars. Make sure you understand what features the car comes with so you can know whether it’s a good price. Also, some dealers might ask for different drive-off fees.

Once you find your best quote, it’s a good idea to verify the details by calling the salesperson who sent you the figures. Review the terms discussed earlier: length of the lease, drive-off fees, included mileage and monthly payment (including sales tax and all fees). Besides confirming the details of the lease, try to get a sense of the professionalism of the salesperson. You want to be confident you will be treated well and that there won’t be any unpleasant surprises when you sign the contract.

With the information you’ve gathered, use an auto lease calculator to compare total monthly payments depending on the sale price, resale value, drive-off fees or other factors.

Close the deal

Before saying yes to the deal, you can ask your salesperson to deliver the car to your home or office. This avoids long waits at the car lots and up-sells in the finance office. If you go to the dealership to pick up your car, make sure you bring proof of insurance. Review the contract to make sure it reflects your agreement. If everything looks good, sign and drive.

If you’re looking to dive deeper, here are more NerdWallet tips on how to get a great lease deal and how to choose a good car to lease.

Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: [email protected].