Vehicle leasing is usually a stupid move. You are paying interest, depreciation, exorbitant fees, and an inflated profit margin, for the privilege of driving a nice car - usually one that you cannot afford. And to boot, when you turn the vehicle in, you don't have anything to put down on the next one, which often forces you into another stupid lease.
But there are circumstances when manufacturers are very interested in moving cars, and are willing to do so at a "loss."
As a general rule of thumb, the total of all payments on a standard 36-month, 30,000 mile lease (not including sales/use tax) should be 45-50% of the MSRP of the vehicle. Recent examples from my local birdcage liner are: (I) Mercedes Benz GLC300, MSRP $43,688, down payment $3,944, thirty-six payments of $469/month: total of payments is $20,828, which is 47.7% of the original MSRP.
(II) Porsche Macan (Base, with modest option package): MSRP, $52,140. $3,995 down, thirty-six monthly payments of $499. Total of payments: $23,962, which is 46% of the original MSRP.
(III)Range Rover Evoque: $45,800. $3,995 plus ($499 x 36) = $21,959 = 47.9% of MSRP.
At 45-50% of MSRP, this is no "deal" at all, and it should be avoided in favor of (a) buying the car, (b) buying a CPO car, or (c) backing off to buy something you can actually afford.
Now consider as an extreme example of a manufacturer trying to move cars, the Chevy Malibu. GM is pushing a $26,000 Malibu (MSRP) lease: $999 down and $149/month for thirty-six months. The total of payments is $6,363, which is only 24%(!) of the original MSRP. If you bought that car, it would only be worth $12-13 thousand in trade at the end of three years, and your depreciation alone would be more than $13,000. Similar savings are offered on the 2017 Chevy Equinox, which is being replaced by a much nicer version for "2018," but still at 35% of MSRP (39 months) it is one hell of a deal on a decent vehicle.
Subaru, Buick, and Volkswagen are also companies that often float incredible lease deals just to move cars. If you like to drive new cars - whether it is to take advantage of the bumper-to-bumper warranties or otherwise, any lease for which the total of payments for 36 months is less than 40% of MSRP is an excellent deal - better than an outright purchase unless you normally keep your cars for 8 years or longer.
KEEP IN MIND that lease deals are often published on versions of cars that lack desirable option packages, with the intent of jacking up the monthly payment when the customer says, "I just have to have a sunroof and heated seats," or whatever. The final deal should maintain approximately the same ratio of total of payments to MSRP as the advertised price. If the final number doesn't meet the right ratio, walk out.
But there are circumstances when manufacturers are very interested in moving cars, and are willing to do so at a "loss."
As a general rule of thumb, the total of all payments on a standard 36-month, 30,000 mile lease (not including sales/use tax) should be 45-50% of the MSRP of the vehicle. Recent examples from my local birdcage liner are: (I) Mercedes Benz GLC300, MSRP $43,688, down payment $3,944, thirty-six payments of $469/month: total of payments is $20,828, which is 47.7% of the original MSRP.
(II) Porsche Macan (Base, with modest option package): MSRP, $52,140. $3,995 down, thirty-six monthly payments of $499. Total of payments: $23,962, which is 46% of the original MSRP.
(III)Range Rover Evoque: $45,800. $3,995 plus ($499 x 36) = $21,959 = 47.9% of MSRP.
At 45-50% of MSRP, this is no "deal" at all, and it should be avoided in favor of (a) buying the car, (b) buying a CPO car, or (c) backing off to buy something you can actually afford.
Now consider as an extreme example of a manufacturer trying to move cars, the Chevy Malibu. GM is pushing a $26,000 Malibu (MSRP) lease: $999 down and $149/month for thirty-six months. The total of payments is $6,363, which is only 24%(!) of the original MSRP. If you bought that car, it would only be worth $12-13 thousand in trade at the end of three years, and your depreciation alone would be more than $13,000. Similar savings are offered on the 2017 Chevy Equinox, which is being replaced by a much nicer version for "2018," but still at 35% of MSRP (39 months) it is one hell of a deal on a decent vehicle.
Subaru, Buick, and Volkswagen are also companies that often float incredible lease deals just to move cars. If you like to drive new cars - whether it is to take advantage of the bumper-to-bumper warranties or otherwise, any lease for which the total of payments for 36 months is less than 40% of MSRP is an excellent deal - better than an outright purchase unless you normally keep your cars for 8 years or longer.
KEEP IN MIND that lease deals are often published on versions of cars that lack desirable option packages, with the intent of jacking up the monthly payment when the customer says, "I just have to have a sunroof and heated seats," or whatever. The final deal should maintain approximately the same ratio of total of payments to MSRP as the advertised price. If the final number doesn't meet the right ratio, walk out.
