Buying a new car is expensive -- with the average price of a new car over $48,000. Because of the high cost, many drivers are considering leasing their next car instead. But there are a few things you need to ask before you sign on the dotted line.
Compared to buying a new car with a loan, Consumer Reports says leasing a car will lower your bill by an average of $139 a month.
“You just have to keep in mind that there are mileage restrictions and potential excess wear-and-tear charges that could come along with leasing,” said Consumer Reports Car Editor Keith Barry.
CONSUMER REPORTS: Guide to Car Lease Terms
After you find the car that you want to lease, it’ll be time to negotiate.
“You can negotiate the vehicle’s overall price, which is also known as the capitalized cost in leasing, and that can significantly lower your monthly payments, so try to strike a deal that suits your budget,” Barry explained.
Other things to negotiate are:
- Your lease interest rate, also called money factor, which influences your overall payment
- And very important, your mileage allowance, if you anticipate driving more than the standard limit
If you are considering an electric vehicle, a federal tax credit of $7,500 for EVs might make leasing even more appealing.
“While the tax credit for buying an EV comes with lots of restrictions – where it’s built, how much it costs, where the battery comes from -- all those go out the window if you lease,” Barry said. “The dealer can claim the full $7,500 tax credit. So first, negotiate your best price, and then make sure that the dealer passes that on to you by taking it out of the overall price of the car.”
Consumer Reports says to stay away from leasing a used car because you’ll encounter higher interest rates and limited manufacturer support. Plus, with the original warranty expired, you’re on the hook for repairing a car you will give back one day.
If you are interested in buying a used car, Consumer Reports offers advice on how to find a reliable pre-owned vehicle at a price you can afford.