No two leases are created equal. Beyond lease residuals, interest rates and cap costs, lease advertisements consist of a predetermined term, mileage allowance and down payment requirement. To compare vehicle lease deals, carefully review the advertisements offered on manufacturers' websites.
Term
Advertised lease terms are flexible; you can alter the term of a lease anywhere from 24 to 60 months. For advertising purposes, the cheapest term is already figured, so changing it will cost you more than the monthly payment you see advertised. Compare leasing term offers against the car's bumper-to-bumper warranty, which differs by manufacturer. You are responsible for all repairs while leasing a car, so ensure your warranty provides enough coverage or consider reducing the lease term to remain under factory coverage. Ideally, the lease term should match factory warranty coverage; otherwise you may have to pay to extend coverage.
Mileage Allowance
Just like the advertised leasing term, the mileage allowance also provides a best-case scenario. Advertisements usually offer 10,000 to 12,000 miles per year, but you can change your allowance up to 18,000 miles per year if necessary. When comparing leases, ensure the mileage is a good match for your driving habits. If you exceed your lease mileage, expect to pay 10 to 20 cents per mile over your allowance, depending on your leasing bank. Match the mileage to your bumper-to-bumper warranty, as well. Make sure you remain under factory coverage during the lease period.
Down Payment Requirement
Down payment requirements significantly impact a lease payment. While the lease payment may appear attractive, the money down requirement may prove expensive. Most lease advertisements exclude tax and fees, which differ by area. Note your down payment requirement when comparing and aim to minimize your down payment amount. You can always call a local same-make dealer to find out the price differences for down payment variations. If your vehicle becomes a loss during your lease, you won't recoup any of your down payment or lease payments; insurance payoff goes to your bank, not you.
Monthly Payment Comparisons
You can roughly estimate lease payments if you want to alter the advertised down payment amount. Every $1,000 you offer toward your lease reduces your monthly payment by about $30 per month. If you subtract $1,000 from your down payment amount, your monthly lease payment should raise about $30 per month. When comparing on your own, use this method to help identify a fair lease with the same down payment amount. Once you've narrowed it down, a dealer can offer you an exact monthly payment with the down payment you choose.
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