Are You a Lease Candidate?
Before you move forward with leasing, ask yourself the following questions:
3. Do you have a high credit score? Most leases require that you have a score near or above 700. Obviously, exceptions can be made.
4. Do you drive less than 15,000 miles a year? Most advertised lease payments are structured around 10,000 to 12,000 miles a year. However, if you plan on driving upwards of 15,000 miles, you should buy the appropriate mileage up front. Typically, lower miles equates to lower payments.
5. Are you considering an electric or plug-in vehicle? With those vehicles being somewhat pricey and the technology changing so fast, it makes sense to lease. The expense of replacing the battery and the limited driving ranges doesn't make sense for consumers to finance those vehicles. To read our analysis of the pros and cons of electric and plug-in vehicles, click here.
6. Are you a vibrant senior citizen, with minimal fixed expenses, and yearn to have a new vehicle as a luxury, as opposed to a necessity, and want to be free of warranty expenses and all of the upkeep that comes along with owning a vehicle?
Conversely, if you plan on driving over 15,000 to 20,000 miles per year, you should consider shying away from leasing -- unless you can write the lease off as a business expense and/or if you plan on buying the vehicle at the end of the lease provided you qualify for financing (or paying the balance (residual value) off in cash.
If you answered yes to the aforementioned questions, you're a lease candidate. To learn about the pitfalls of leasing and negotiating a lease, click here.
And to check out our radio interview with a national leasing expert on how to calculate a lease and the pros and cons of leasing, click here.