Originally Posted by mar123
The higher the residual on the car, the better lease you can get.
In this market, I think the type of deal you can get is totally dependant on your credit. They are practically giving cars away to people with good credit. Bad credit? Not so much. Good Luck.
There are so many factors that come into play with leases. Not all (but most) benefit the manufacturer or leasing company.
Like what is mentioned above, lease costs are lower if the car is expected to have a high value at the end of a lease.
For example - a Volvo SUV that costs $45,000 might have a residual value at the end of the lease of $30,000.
A $45,000 GMC Yukon might have a residual value of $20,000.
A lease on the GMC is going to cost more because the car is worth less at the end of the term.
The manufacturer/leasing company is going to build more into the monthly lease cost and possibly require money down at signing. They want to make sure, as much as possible, that they don't loss money. (I used to work in finance and the bank had a leasing company as well as a residual insurance company.)
Depending on ones requirements, a lease might
We leased a car about 4 years ago. We knew we would get a new car after 36 months no matter what, meaning any vehicle we got would be replaced after 3 years.
When I ran leasing costs against buying/financing costs + estimated value at the end of 36 months, leasing came out to be much cheaper, like $300 per month cheaper.
I did the same at the end of the lease and as I expected (and hoped!) we still came out better leasing, leasing was $200 per month less expensive than buying/financing/reselling the same car. (changing rates of return came into play.)
It worked for us because of the following -
We took the base model offered. Had we wanted to upgrade, the lease cost would have jumped dramatically.
I knew we wouldn't go over the milage allowance.
All maintenance was included. In three years I did not spend one dime on maintenance, tires, inspection - nothing. (the tires weren't include, I just didn't wear them out.)
It was a no money down lease.
The manufacturer was obviously desperate to get the model year off the lot before the new model year arrived.
We had good credit.
The deal we got was a good one but it took a lot of analysis. We had a set cost in our head and shopped from there. We didn't care about brand, just that we needed a 4 door sedan. Had I been hung up on a particular brand/model, the savings would have been blown.
A Google search will yield many lease versus buy calculators.