Leasing a car can be a much easier option than riding the bus every day, paying for taxis, or relying on friends for rides. But, as with any lease, there are rules and regulations involved. There are also better times of the year to lease a car.
When you lease a car, you are essentially renting a motor from a dealer for a set period. This is typically around 24 to 36 months. The process is similar to financing a car you are purchasing. You make a down payment and then make fixed monthly payments for the agreed period of the rental.
When this lease comes to an end, you will then return the motor to the dealer. On some occasions, you may also have the option to trade it in for another new lease, extend your existing lease, or even buy the car outright.
Of course, you do not want to end up with substantial monthly payments so it’s important to know when the best time of year is to lease the vehicle.
In today’s article, we will be discussing the factors that come with leasing a car and when the best time is to do this. In general, though, the best time to lease a vehicle is around the same as the best time to buy one.
Here’s all you need to know about the best times to lease a car and how to know if leasing is the best option for you.
The Best Month To Lease A Car
New cars are released at all times of the year but this is usually at the manufacturer’s discretion. That being said, the majority of new cars are launched between July and October. Therefore, this is generally the ideal time to lease a car.
The reason for this comes down to the car’s residual value. This is the estimated value of the vehicle at the end of the lease term. No matter what vehicle it is, they all depreciate in value over time. This is why car dealerships will subtract the projected decrease in value of the vehicle from the current price. The result? The car’s residual value.
Dealers usually estimate how much value a car may lose by using the ALG’s (Automotive Lease Guide) Residual Percentage Guide. Many factors can determine this decrease in value such as the make and model of the vehicle, its age, and mileage.
Overall, the lower a car’s residual value is, the higher the lease payments will be. This occurs because you will need to pay for any value that may be lost during the time you are leasing the car.
As soon as a car manufacturer releases a new model, the prices of their previous models will immediately drop. Therefore, these tend to come with better lease deals. When it comes to the vehicle’s resale value, however, this tends to remain relatively high. But, this leaves customers with the chance to negotiate considering the residual value has decreased.
Time Of The Month
While July to October is the best window for leasing a car, you need to consider whether the beginning, middle, or end of the month is the right time as well.
The majority of auto dealerships have monthly sales quotas in place. Therefore, there is a higher likelihood that they will offer discounts toward the end of the month to help boost their monthly sales.
We suggest approaching a dealership in the last week or 2 to 3 days of the month. You may get lucky and manage to negotiate an already cheaper price to something closer to a bargain.
Sales
Many car dealers offer sales for special holidays throughout the year. Some examples of these holidays include:
- Memorial Day
- Labor Day
- 4th July
- Thanksgiving
- Christmas
It is always worth making inquiries around these specific holidays to possibly achieve a better deal. It’s similar to many retailers who have discount sales around holidays to attract more customers. While their prices may be a little lower than usual, the fact they attract more customers means their profits can still continue to rise.
If you try to lease a car around the holidays, ensure that you read the small print first. Upon closer inspection, you may find that a great number of these deals have tight restrictions such as mileage limits. If you go over the mileage limit, you could be facing further costs.
The good news is that most manufacturers release new lease deals at the beginning of the month so they shouldn’t change for any specific occasion.
The End Of The Year
If you can wait till the back end of the year, we would recommend it. Of course, you need to be flexible when you need to lease a car. If you can not wait, try one of the options earlier. If you are free, waiting till the end of the year can mean year-end sales and a lot of money off on the lease.
All dealerships need to maintain quarterly and year-end sale goals as well as their monthly quotas. Therefore, if they are a way off their target for the year’s sales, they may start to offer great deals.
If you are lucky enough to catch a dealer who is just shy of their quarterly goal, you stand the chance of grabbing a fantastic deal. We recommend visiting a few dealerships to see if they offer deals and, if they do, which ones have the best offers.
This additional research time should pay off as you can negotiate with a dealer and possibly bring a price lower than you could imagine.
In Summary
Knowing the best time or times of year to lease a car can significantly cut costs on the lease term. A good place to start is to approach dealerships just after a car’s new release, at the end of the month, or around the sale quarter.
You can even consider other aspects such as when business may be slower in your region. If a dealer is experiencing poor sales due to various situations, this will give you leverage to score an unbeatable deal on the lease.