Smart Leasing Begins Here! Tips on How to Lease Like a Pro Part4
Welcome to part 4 of the series on how to lease like a pro. Remember that smart leasing does not only begin with choosing the right car as you will also need to take into account a variety of factors such as the residual value and the cap cost reduction of the car.
We will now talk about the lease term and how this alone will affect the price of the lease.
How the Lease Term Affects Car Leasing Prices
Similar to buying a car and entering a financing scheme, the term of the lease will play a big factor in determining how much you need to pay.
Look at it this way: choosing a longer lease term may seem to be more practical upon first glance as you will effectively get lower monthly payments but a closer look will reveal more about the importance of choosing the right lease term.
Remember that you are paying less in terms of monthly rates but you are also paying the said amount for a longer time. For example, if the lease price of the car is $230 for a lease term of 36 months then this will equal to $8,280. If the car is being offered for $199 for a 48-month lease term then you would have paid $9,552 after the lease term expires.
The savings will eventually add up. The good news is that car dealers will most likely offer attractive leasing deals over an average lease term. Stay on the safe side of things and avoid choosing a car lease that is more than two to three years, or around 24 to 36 months. Anything longer than that will expose you to the risk of paying more for your car.
Another thing to remember is that a longer lease term will also result in a higher interest rate. This is due to the fact that lenders and car dealers will have to deal with an extended risk period as well.
Intelligent car leasing starts here. Find all the latest car leasing deals before making a decision in order to find the best car lease for the money.