Leasing More Attractive Due to Higher Resale Values
When you lease a car, you're essentially paying for the depreciation cost. Since residual values have been going up, leasing has become a more attractive option.
The average length of a lease dropped to 41 months, which is much shorter than the 64 months of the average car loan.
Leasing is especially popular with luxury-car shoppers.
More than 59 percent of shoppers who chose Mercedes-Benz decided to lease the vehicle. For BMW, the figure was 57 percent.
It's important for consumers to make an informed choice between buying and leasing.
If the monthly payment is the same for buying as it is for leasing, and if you can handle the longer contract term - typically five years for purchase versus three years for a lease - you're still better off buying.
You wind up owning the car at the end of five years. And at three years, you at least have equity in the car.
If you do lease, it's recommended that you stick to a maximum of 36 months so that the vehicle will always be under the included bumper-to-bumper factory warranty.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid