Choose a make and model that has a reputation for holding its value and being a strong resale candidate. This will reflect in a strong residual. Remember, your monthly payments are based, in part, on the residual. The stronger the residual, the lower the monthly payments.
When evaluating leasing programs, oftentimes "factory–sponsored" (i.e. Chrysler, Ford, GM, Honda, Mercedes, etc.) leasing programs offer lower payments than leases offered by independent lenders. The reasons are simple.
Leasing helps them more quickly "move more metal," (i.e., sell more vehicles).
They tend to project higher residual values for their own vehicles than do independent lenders because they have a highly organized dealer network to assist in the disposal of these vehicles at the end of the lease term.
They even subsidize some lease rates in order to build customer loyalty.
Some even have programs whereby leasing another vehicle at the end of a term can be done without any security deposit.
Shop around. Go to several dealerships. Get their "best deals." Focus on more than just the monthly payment. Make sure they disclose all fees, terms and conditions so that you are always "on the same page" as the leasing representative.
Negotiate hard to get the lowest price for the vehicle (the capitalized cost), before you request that the dealer give you a lease price. Make sure the lease payments are based upon the same price you negotiated for the purchase.
Don´t load up on extras. For example, why pay extra for an extended warranty, or rust proofing, on a vehicle you don"t own and only intend to keep for 2 or 3 years?
Ask about the annual mileage allowance. All leases limit the number of miles that you may drive during the term. If you exceed the limitation, penalties can run as much as $.15 per mile.
There are a number of options here, for instance: 12,000 miles per year, 15,000 miles per year, etc.
If you drive a great deal, it may be wise to accept a slightly higher monthly payment in order to increase the annual mileage allowance. Likewise, it may be in your best interest to request a lower mileage allowance in order to lower your monthly payments.
Ask what penalties will be assessed in the event you terminate your lease before the end of the term. It is not a good idea to terminate your lease before the end of the term. Most leases provide for stiff penalties when a vehicle is returned early. You should be realistic about how long you intend to keep the car and don´t agree to a term that you do not intend to honor.
Ask if there are late payment penalties.
Ask what the standards are when determining "wear and tear" on the vehicle. This is a very subjective area and has provided a serious profit center for some lenders. If you abuse the vehicle, you may both lose your deposit and face additional penalties.
Make sure you understand your total obligation and exact monthly payments, including sales taxes.
Never put extra money down to lower your monthly payments. Why put equity into a vehicle that you will never own.
