Not everyone is fond of buying luxury cars.
That’s not to say that you wouldn't enjoy a fantastic ride in a luxury vehicle though. It is difficult to decide on the right vehicle, the buying cost versus long-term expenses, and its usefulness. For those who prefer an alternative to buying a car, you can lease a luxury car and get all the benefits of driving around in the automobile of your choice.
However, choosing between buying and leasing a car can be a tough call. You might be unsure if leasing is best for you. We take you through all the things you need to know to make this decision.
Is Leasing a Luxury Car Right for You? Check these leasing basics first.
The ins and outs of deciding to lease a luxury car can be complicated. When you decide to lease a luxury car, you don’t pay for the entire car. Instead, you make a down payment and pay monthly installments for the pre-decided period. Of course, there are many factors to consider before you lease a luxury car.
1. What does it mean to lease a car?
When you buy a car, you have to pay the principal amount back. To lease a luxury car means you take on secondary liability and spend only as much as you can afford unlike when you buy a car.
The advantage when you lease a luxury car is that you only pay that amount on the monthly installments. You borrow and pay back the amount during the depreciation years thereby reducing the financial burden.
2. How is leasing a luxury car different than buying?
As a luxury car owner, you have to accept the depreciation that comes with time. While you are a car owner, there are no additional benefits that supersede leasing. In leasing, you keep paying for the time you lease a luxury car and then do away with it or change to a new one.
Your costs are controlled in leasing and don’t carry the extra costs associated with car buying. Auto manufacturers keep the lease costs lower to increase lease consumption. As a lease owner, you get better choices or residual in a leased car. Thereby, you find a more extensive selection for a leased car for a lesser time than one with ownership.
3. Are there any benefits to leasing a car?
The amount saved on the principal can be put to good use to get cheap car leasing or lease high-end luxury cars frequently instead of paying for years for one car until the entire amount is paid.
Of course, you have to budget for the lease expense so you can spend on the car you need. When you lease a luxury car try to get the best lease deals. It will give you an upper hand, and you might land some sweet deals worth your money.
4. When should you consider leasing a car?
To lease a luxury car is a personal decision. However, there are instances when you should consider leasing rather than buying a new car. It could be for business purposes or hiring new cars frequently to meet client needs.
You might have a tight budget and don’t want the trade-in hassles. If you are considering paying lesser tax, then taking advantage as lease deals are the way to go. You might be among those who love changing cars frequently, if which you should lease a luxury car instead of buying one. Thus you enjoy the freedom of paying as per your use and pre-decided time.
5. Are there any downsides to leasing a car?
If you often drive, keep a tab on the miles covered since there is a cap on the number of miles you can operate in a leased car. Most often, 12,000 to 15,000 miles per year is the maximum limit. Surely, you can drive more if you wish. But you’ll have to pay for the additional miles covered.
If you lease a luxury car, you aren't exempt from the wear and tear or any damage to the car. Anything beyond a certain acceptable limit and you might end up paying just as much as any owned car for the loss or recurring wear. Taking care of the car is as much a responsibility for a leased luxury car owner as it is of a vehicle bought under one’s ownership.
Lease a Luxury Car: Things to Know About Leasing
Now that you are familiar with leasing and its basics let’s dive into few essential questions to ask before and during your lease purchase. We check the best luxury cars you can lease and expert opinion to lease a luxury car.
Are you familiar with leasing terminology?
Before deciding to lease a luxury car, be aware that once you enter the dealership or manufacturer’s workshop, you will come across many complicated terms making it difficult to understand if leasing is right for you. Some common words are:
- Residual Value: This is the car’s worth at the end of the lease period. This is decided at the start of the lease period based on the percentage depreciation anticipated. The advantage here is that it might not take into consideration the actual value of the car three to four years down the line.
- Capital Cost Reduction: This is a cost that will reduce overall cost either due to a rebate or trade-in. It is also the down payment. At times, most popular deals might not involve a capital cost reduction.
- Capitalized Cost: The actual price of the vehicle is the capitalized cost. It is also the lower cost if you can negotiate it.
- Disposition Fee: There is a cost associated with getting the leased car back on the used lot. This charge is called a disposition fee and occurs at the end of the lease to prepare the luxury car to be reused again.
Questions to Ask Yourself Before Leasing a Luxury Car:
Even though leasing might sound perfect for you, you have to judge if you are prepared to lease a luxury car. Before you wonder which the best lease deals near me are, cross-check the following questions to see how you fit in.
1. Do you have sufficient budget?
Leasing is a preferred mode of car ownership for many. However, before you plan to lease one, make a concrete plan for your monthly lease expense, the down payment, and security deposit if any needs to be given. At times, some dealerships might have some special offers. Make sure to avail of it promptly else you might have to bear higher costs on the lease of a luxury car. Try to focus on reducing the capitalized cost as lower cost, and in turn, it will lead to lower monthly payments.
2. Do have good credit?
A good credit score means you are on the right side of paying regularly. You are an ideal candidate for leasing and dealers would prefer doing business with you. In case you have a bad credit score, first work on improving it to lower your chances of rejection or maybe even paying higher monthly installments over a longer time frame.
Questions to Ask the Dealer When You Lease a Luxury Car:
Since you have done the preliminary background study, you can now evaluate your options to get the best deals on a lease of a luxury car. When you lease a luxury car, check for your negotiating options, primary or excess fees, and also your exit options.
1. What are your negotiating options to lease a luxury car?
You might not be aware, but when you lease a luxury car, you can negotiate on a few factors. Though the negotiating power is in the hands of the dealer or manufacturer, you can have your way on the cap cost, money factor on lower interest rates, buy-out price in case you plan to keep the car for longer, and excess mileage charges if you negotiate well. However, you cannot settle on the residual value, disposition fees, and acquisition fees.
2. Are there any fees and additional costs?
Most dealers stick to common fees incurred on the lease of a luxury car. These include acquisition fees, delivery charges, and purchase fees. These fees might be somewhere in the range of $1000-$2000 and are something you cannot escape. Of course, if you try to reduce the expenses before leasing, you might get lucky.
3. What are your exit options?
Once you're ready to end your lease term, you can hand over the keys and walk away. However, if you have grown fond of the car, you can purchase the car by negotiating on the buyout price. If you have sufficient cash, you can pay for the car and own it. If there are other cars with the same performance and higher rate, you can then sell this car at a higher price and make some good money. If the vehicle is less than the actual purchase price, then you should evaluate the cost of owning such a car and probably best leave it with the dealer.
Experts Weigh In On Leased Cars
You don't have to take our word for it. Consider the advice of the experts below when considering whether or not to lease a luxury car.
Leasing vs. Buying a Car - Dave Ramsey Rant
In this video, Dave Ramsey answers questions on leasing even while speaking about the loss of car value and the cost of capital in leasing. He explains the advantage of leasing for a car manufacturer or dealer in detail. It’s worth taking listening to the valuable insights of Dave Ramsey in this video.
How a Lease Works
Laura Madison neatly explains lower payment and the advantage of using a car for three years. A visual board representation helps you understand how Toyota leasing works and how it can benefit you. The equity on the vehicle is something you can gain an advantage of and use it to finance your next luxury car lease. The exit procedure for a lease on a luxury car is also touched upon.
How to Best Negotiate a Car Lease in Four Steps (and SAVE MONEY)
Negotiating the lease of a luxury car can be tricky for anyone. You can follow the simple steps explained in this video to negotiate a deal well. You can negotiate a purchase price, request a lease quote, calculate components of a lease, and also reduce cost and rent charge. By focusing on these four aspects, you can ensure you have tried your best to minimize the expenses incurred on a lease of the luxury car of your choice. Also, this will reduce the financial burden on lease of a luxury car over the next three years or so.
Great Luxury Cars Available to Lease
Once you are in the market to lease a luxury car, you have many options to select. You might wonder what the best car lease deals are right now. Go for those that have a strong reputation and have serviced leases for a sufficient time. It will ensure you don’t get cheated and are doing business with genuine, reliable dealers who give valuable service for your lease period.
The Lexus RX comes with style and class. You have many variants to pick. RX 450h, RX 350L, RX 350F Sport and RX 450 hL. Each of these is smooth, quiet and has luxurious interiors. The safety features are the highlight of these models.
With estimated 19/26/22 (City/Highway/Combined) you can be assured you are in for a top performing car. Annual fuel cost is approximately $1850. You can do a back of the envelope calculation and estimate the cost of leasing one of these beauties. While you are at the dealer, check for zero down lease specials, new car lease deals, best lease deals, or if it suits you, rent to own luxury cars.
BMW 3 Series
Another luxury class car, the BMW 3 series model is perfect for a business meeting or a romantic getaway. If you are tight on a budget but wish to lease a BMW 3 series you can check out the lease cost with the dealer. With a BMW 3 series, you get surgical precision and excellent control.
While you cannot customize it on a lease, you do get the facility of superb grip with the help of advanced suspension system supported by advanced real-time information on the road. The powerful award-winning engine is another reason to depend on BMW 3 series for your leasing needs.
Infiniti offers finance and car lease specials on a number of its cars. From Sedans, Coupes, Crossovers, and SUV lease deals, your local dealers can give you the best deal on an Infiniti of your choice.
By going to the Infiniti official site, you can estimate the cost of the net trade-in value, down payment, and also check your credit score for eligibility. All you have to do is enter your zip code, and you’ll be able to judge for yourself the potential of you leasing a luxury car like Infiniti.
Mercedes C Class
The sporty and stylish Mercedes C Class is a delight and matter of pride for the driver. As a lease owner, you can enjoy the classy ride by checking for offers and deals from your local dealers. You get to seize this generously spacious car by working on the leasing terms by negotiating the best price you can have.
Besides the grandeur of driving around in a Mercedes C Class, it is the perfect choice to lease since the ultramodern look goes for the formal business meeting and also the casual get together of friends and family. With its racing-bred design, it is sure to leave people breathless as you move effortlessly without noise on the road.
Leasing a luxury car might be the best decision if it meets your specific car needs.
As with all decisions surrounding cars, choosing to lease a luxury car can be difficult. This list can help you understand the basics of leasing, decide whether leasing a luxury car is right for you, the pros and cons of leasing, and which luxury cars are best for leasing. We hope you enjoyed reading the list and learned a thing or two!
Do you have questions on the lease of a luxury car? Have you ever leased a car? Share your questions and experiences with us in the comments! If you know of anyone looking for a low-cost lease of a luxury car, share this list with them!
Related Article: Amazing Vehicle Hacks You’d Have Never Known But Must Try