When Should You Lease Your Car? Here's the Best Time to Do It

When Should You Lease Your Car? Here's the Best Time to Do It

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A leased vehicle can be an appealing option in certain situations. 

Maybe you'd like to minimize your monthly payments as much as possible, which a lease can do. Or, if you're someone that likes driving the most up-to-date models with the latest tech features, leasing lets you turn in your car for a new vehicle every few years. Along with those perks, leasing gives you the protection of a manufacturer's warranty during the term length.

But like when you're car buying, certain times are more advantageous to lease a vehicle. 

But when is the best time to lease a car? 

Let's look at the details of when to lease a car.

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All about leasing a vehicle

Leasing a car is a lot like renting an apartment or a house. You sign a contract, promising to make payments for some time, in turn receiving use of the vehicle while meeting certain conditions. 

Also, similar to renting property, once a car lease term ends, you return it to the person you entered the contract with, known as the lessor. 

And just like renting real estate, when you lease a new car, you promise to keep it in good condition and drive it under normal circumstances. When it's time to return the vehicle at the end of the lease, you could be charged extra for excessive wear and tear. 

Many factors play into determining your monthly lease payments. The capitalized cost (cap cost), money factor, mileage limit, and residual value are among them. 

The cap cost substantially affects your monthly payment amount when you lease a car. The cap cost is another term for the vehicle's purchase price that you negotiate with the lessor, either at or below MSRP. It's essential to get a good deal on the capitalized cost because it affects almost every other element of your lease contract. 

The money factor on a car lease is similar to the interest rate for an auto loan. Sometimes referred to as the lease fee or lease factor, the money factor is a financing charge added into your monthly lease payments. 

During the lease term, lessees must stay within a yearly mileage limit or pay additional fees when they turn in the vehicle. Typically, annual mileage limits are 10,000, 12,000, or 15,000 miles. Lower yearly mileage limits mean lower monthly payments and vice versa. 

Once a lease ends, the residual value is the car's estimated value, with depreciation taken into account. Before turning in the vehicle, you'll have the option of purchasing it for the residual value, also referred to as the buyout price. 

Buying a used vehicle offers you the chance to save thousands of dollars versus buying a new one. But where can you go for not only a great price, but also a quality car? Shift's certified mechanics perform extensive 150-point inspections on every car and have complete vehicle history reports, so you know your used car feels as good as new. Shift's website has a large selection of fully inspected vehicles located across the country that are ready to go. The website is user-friendly, and you'll be able to find various makes and models to suit your needs and budget. Want to take a test drive before you buy? If you live in one of Shift's many service areas, a concierge will drive to you, letting you get a feel for the car's performance before signing the papers.

When is the best time to lease a car?

Specific times of year present better opportunities to buy a car, and the same logic applies to leased cars. These time frames traditionally offer lessees better car deals and coincide with certain events throughout the calendar year.

When a brand-new model first arrives, you're apt to receive the best deal on a car lease. That's because when a particular model has just hit the market, it has a high residual value, saving you on depreciation during a lease term. However, if a new model is especially popular, you may want to wait a little while so you can secure a better cap cost on your lease. New models usually arrive between July and October but can debut at other times of the year. Keeping up with the latest manufacturer news can help keep you informed on model release dates. 

Holidays also give car shoppers the chance to save. Around holidays, manufacturers and sellers usually run promotions and sales, offering special lease deals that might be too good to pass up. Three-day weekends, in particular, can present especially excellent lease offers. Traditionally, Labor Day and Memorial Day are known for the best deals. 

The end of sales periods – whether the end of the month, end of the quarter, or end of the year – is usually another good time to lease a car. Salespeople may have the incentive to reach a specific quota and move more vehicles in a small amount of time. As December winds down, lease deals can be excellent, with the need to hit monthly, quarterly, and yearly sales targets.

Though buying a used car can be a lot of fun, what if you need a car loan? Financing can be a hassle, with confusing terms like APR and interest rate, and applying takes up your valuable time. Shift makes financing your new-to-you vehicle easy by working with a network of trusted lenders who compete for your business, so you get the best deal. And there's no cost or obligation when applying for a loan with Shift. Financing with Shift is so convenient that nine out of 10 buyers choose us when they need a loan. If you have a low credit score, don't worry. Shift welcomes co-signers, too.

When to lease a car in summary

If you're looking to lease a car, certain times of the year offer more chances to save.

Lease deals are notably better when a new model hits the market, with higher residual values that lower your monthly payments. But if a new model is a hot seller, it could pay to wait a while to pay a lower capitalized cost on your lease contract. 

Traditionally, holiday periods during the year bring promotions and deals on leasing that help save your hard-earned money and drive away in the car you want. Three-day weekends, in particular, feature excellent opportunities to score a good lease. 

Since sellers look to meet sales numbers at the end of specific periods like the month, quarter, or year, those times are your chance to sign on to an even better lease agreement. Salespeople may have the incentive to meet a sales goal, and consequently, give you a great deal on a lease.

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Author
Shift Editorial Team