More people are leasing new cars but does it make sense for you?

Feb 6, 2024, 11:51 PM | Updated: Feb 7, 2024, 7:35 am

SALT LAKE CITY — Sticker shock is nearly universal for anyone looking for a new car and that has many drivers considering leasing their next car. But is it the right option for you?

The average price for a new car is just over $48,000, according to Kelley Blue Book. Little wonder why 1-in-5 new cars were leased last year.

“The monthly figure for a car lease will often be much lower than if you’re buying it outright,” said Consumer Reports’ deputy auto editor, Jon Linkov. “If you’re really trying to get more car for your money than what you would get for buying, a lease could be a possible option for you.”

Another potential pro is leasing gets you the latest comfort and safety features. Plus, that car is likely more fuel-efficient and is always under warranty.

“So, if you get a two- or three-year lease, you don’t really have to worry about something breaking down as far as a parts failure or anything like that,” Linkov said.

But there are hitches. All leases limit the number of miles you can drive. Go over that limit, that’s a penalty of 10, 15, maybe 30 cents for each extra mile.

“You put on an extra 100 miles, OK, not great, but it’s alright. If you put on an extra 10,000 miles, that’s a ton of money,” said Linkov.

Those can’t be rough miles, either. When the lease ends, you’re on the hook for any excessive wear and tear. You could have to cough up cash for stuff like door dings, tears, scratches, cracked windshields and worn tires.

“So, you really have to be careful that you’re not a person who customizes a car,” he said. “Or, is kind of just rough and abusive with a car.”

If leasing is for you, the monthly payment listed in an ad isn’t set in stone. You can negotiate on the car’s overall price, the lease’s interest rate — even the mileage limit. Linkov says knowing fair market values and incentives, plus having quotes from other dealers gives you leverage. Don’t just walk in saying you’re willing to spend something like $450 a month.

“For $450 a month, they will find a car for you, and they will find the lease for you,” Linkov said, “But you may be spending $75, $100 a month more than you need to.”

There is a $7,500 tax credit for electric vehicles up for lease. It technically goes to the leasing company, but Linkov said you can negotiate with the company to pass some or all that credit to you in the form of lower lease payments.

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More people are leasing new cars but does it make sense for you?