How to Buy a New Car With a Lease

Buying a new car with a lease means that instead of purchasing it with an auto loan, you rent it for at least three years and return it to the leasing company at the end of the term. The leasing company is usually a bank, car dealer or car manufacturer. Once it's turned in, the vehicle is worth about half of what it was worth when it was new. Leasing is a good option for people who drive limited miles and like the idea of having a brand new car every few years.

Difficulty: Moderately Easy

Instructions

1. Expect monthly lease payments to be less than car loan payments are, because instead of paying off 100 percent of the vehicle, you're only paying off 50 percent of the car's value.

2. Haggle a lower selling price or put cash down to reduce what's called the cap cost. This Capitalized Value, or Gross Cap Cost, is the selling price to the leasing company. If it's reduced, your monthly lease payments will be lower.

3. Keep your mileage in check. Most lease agreements limit you to 10,000 to 15,000 miles per year. If you go over the designated mileage, you'll owe penalties at the end of the lease term.

4. Get a lease term that coincides with the manufacturer's warranty. This way, major car repairs will be covered.

5. Wait until the end of your leasing term and ask the company if they'll sell you the car at a lower rate. The amount they usually want to charge is a few thousand dollars over market value, which is not a good deal. If they won't negotiate, turn in the vehicle.

References

• LeaseGuide.com
• CarBuyingTips.com