In the United States, one in four cars is rented instead of bought. Knowing the right time to lease a car can still save you a huge chunk of change. For example, during certain times of the year — such as the end of a sales period or the holiday season — the cost of renting a vehicle can be significantly lower.
If you’re in the market for a new car, you may be wondering when the best time of year is to lease one. While there’s isn’t a definitive answer, there are a few scenarios where the cost of leasing a car can be significantly lower. In this article, we’ll take a look at when these periods are, as well as provide some actionable tips to help you score the best possible car lease deal for your financial situation.
Best time to lease a car
So when exactly is the best time of year to lease a car? Below are three scenarios where the cost of leasing a car can drop much lower than usual.
When a new model comes out
When a new car model is introduced, it generally drives down prices on outgoing older models. New car models typically come out in the fall (autumn) of the previous year — for example, the 2022 Honda Civic Si came out on October 19, 2021. But sometimes, new car models make their debut as early as mid to late summer.
Keep in mind that if you’re leasing an older model, you might not have access to features and upgrades that come with the new car models. However, if this isn’t a decisive factor for you, leasing a car during this time period is a viable option to consider.
End of sales periods
Another great time to score major discounts on car lease offers is during the end of the sales period: the end of the month, quarter, or year. Why is that? Well, many car dealerships actually offer bonus payouts for salespersons who meet sales targets. This means that if sales quotas still haven’t been met by the end of the sales period, dealers might offer generous discounts and incentives to help sell more vehicles in a short amount of time.
During holiday sales
Lastly, leasing a car during the holidays can also be a smart financial decision. This is typically when dealerships will offer special discounts and incentives — such as on the Fourth of July, Labor Day, Memorial Day, and Christmas. Just be aware that car dealerships can get quite busy on these holidays, so make sure to test drive the car you’re interested in a few days before leasing.
How does a car lease work?
Car leases can be a good option for people who want to drive a new car every few years but don’t want to deal with the hassle of selling and buying cars. Most car leases are structured so that you, the lessee, make a series of monthly payments over the lease term — anywhere from 24 to 36 months. These payments typically include a depreciation charge, which covers the expected decrease in value of the car throughout the lease, as well as other associated fees, such as a finance fee.
Since you’re technically the owner of the car during the lease term, you’re responsible for any repairs or maintenance (outside of the manufacturer’s warranty). At the end of the lease term, you’ll typically have three options available to you: set up a new lease with a new vehicle, return the car to the leasing company or dealership, or buy the leased car outright.
Tips for leasing a car
Before taking the plunge and leasing that car you’ve always wanted, there are a few steps you can take to help you make the most informed decision.
Do your research
Just like any other financial decision, it’s important to do your research before leasing a car. You’ll want to compare different makes and models to find the one that’s right for you. It’s also important to consider your budget and the monthly payments you can afford. This way, you’ll know exactly what to expect and won’t be caught off guard later on. You also won’t run the risk of defaulting on a car lease and leaving a stain on your credit history.
Check your credit
Your credit score can have a big impact on the terms of your lease. If you have a low credit score, you may be less likely to get approved for a lease, or you might be offered higher rates. Be sure to check your credit score before shopping for a car lease. That way, you’ll have a better idea of whether you can meet the lease requirements.
Negotiate the terms of your lease
Just like with car buying, it’s important to negotiate the selling price of the car, since it’ll directly affect the monthly lease payments you’ll have to shell out. It’s also worth negotiating the money factor (interest rate on the lease) and the mileage limit (the maximum number of miles you can put on your leased car before having to pay a penalty).
Read the fine print
Be sure to read the fine print before signing a car lease. This is where you’ll find details about the terms of your lease and fees associated with leasing a car. In some cases, you might be asked to pay extra charges for wear and tear, excess mileage, or early termination of the lease.
Maintain the car
Maintenance means keeping up with regular oil changes and tune-ups and addressing any issues that come up right away. If you allow the car to fall into disrepair, you could be charged for repairs when you return the car at the end of the lease. Additionally, be careful of any damage you do to the car. Beyond normal wear and tear, even small dings and scratches can result in additional fees.
Is it better to lease a car for 24 or 36 months?
When you lease a car, you may be presented with the two most common lease terms: 24 months and 36 months (though 48-month and 60-month terms are also available, they’re much less common). Which is better? Short answer: it depends.
Generally speaking, 24-month terms tend to have more expensive monthly payments. However, you’ll probably save more money over the course of the lease contract compared to a 36-month lease, since you’ll pay less interest. If your priority is to lower monthly payments and increase affordability, then the 36-month lease might be a better option for you.
Is it better to lease a car in December or January?
According to the automotive experts at Edmunds, December is without a doubt a much better time to snag a deal on car lease payments than January. In fact, December has an average discount of 6.1% off MSRP (manufacturer’s suggested retail price), the highest discount of any month in the year. Since the year is approaching an end, dealerships are motivated to close off the year with strong sales. This means they’re eager to offer high incentives and discounts to get rid of any prior-year models that are taking up space.
- In general, the best times of the year to lease a car are when a new car model comes out, at the end of a sales period, and during the holidays.
- When your car lease ends, you can either return it to the dealership, set up a new lease with a new car, or buy the leased car you’ve been driving.
- Before leasing a car, it’s important to do your research, negotiate the terms, make sure you have a good credit score, and read the fine print before signing on the dotted line.
- The best month to lease a car is December, when dealers are eager to close off the year with strong sales and meet their yearly quotas.
If you’re interested in leasing a car, it’s worth knowing the best time to do so. By understanding how leases work and when the best deals are available, you can save yourself money down the road.
If you’re at the end of your lease and want to buy a different car instead of continuing to lease your current one, it may make sense to finance your purchase with an auto loan. This will allow you to spread out the payments over time and avoid having to come up with a large sum of money all at once. You can find the best auto loans by shopping around for rates and terms that fit your needs.
View Article Sources
- What should I know about the differences between leasing and buying a vehicle? – Consumer Financial Protection Bureau
- Auto Leasing Gains Popularity Among American Consumers – The New York Times
- When Is the Best Time to Buy a Car? – Edmunds