How to Lease a Car

Before you sign a lease, research the best car lease deals available near you.


If you want to drive a new car, but don’t want to commit to buying one with cash or financing, leasing a car might be right for you. Car leasing has expanded from corporate and luxury car deals to become mainstream. Nearly one-third of new vehicles are leased rather than purchased, according to U.S. News & World Report.

If the idea of leasing appeals to you, follow these steps to get the best lease deals. Depending on your credit and other factors, you can qualify for lease deals that come with an affordable down payment and a low monthly car payment.

How a Car Lease Works

Your car lease terms include a lot more than just the monthly payment. Your lease agreement will likely include stipulations such as the number of miles you can drive per year before additional fees apply, required insurance including gap insurance coverage, disposition fees, charges for excessive wear or car damage, and whether you have the option to purchase the car at the end of the lease. By following critical steps including thorough research, saving for a down payment, and comparing lease deals, you could be signing your lease contract and in the driver’s seat in a short amount of time.

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How to Lease a Car

Similar to the car-buying process, leasing a car requires multiple steps with several decisions to make along the way. Research costs and evaluate your budget to determine how much car you can afford before signing a car lease. Before you can drive off a dealership lot with the car of your dreams, follow these five steps to lease a car.

1. Choose What Type of Car You Want

Do you need a minivan to accommodate your growing family or would you prefer a sporty convertible that only seats two? Maybe you’re looking for a hybrid to save gas commuting or need a luxury sedan for meeting clients. With more than 490 automobile models in American showrooms that get 30 mpg or more, the choices can be overwhelming.

By first determining the kind of vehicle that best suits your needs, you can reduce the time required to find the right car with the best lease term. You also can protect yourself from being talked into a car you don’t need by knowing what you want before you step onto the dealer’s lot.

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2. Research Car Makes and Models

You don’t have to drive to the dealership and kick the tires to determine the best car deals. Plenty of online resources are available that will tell you everything you need to know about most new cars on the market.

Companies like J.D. Power, Edmunds, Car and Driver, Motor Trend and Consumer Reports do the work for you, providing the pros and cons of everything from engine performance to interior trim and safety features. Quality resources also provide information on the vehicle’s anticipated resale value, an important factor because you might have the option to purchase the car at the end of your lease.

Read: This Is How Much of Your Income to Put Toward Car Payments

3. Save for a Down Payment

As with a regular car loan, a larger down payment will typically result in a lower monthly payment on your lease. Even if a dealer advertises “no money down at signing,” you need to be prepared for the fine print, which could include extra charges such as a security deposit, licensing fees, taxes, and more.

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The Federal Trade Commission urges consumers to get car quotes and compare lease deals from multiple vendors before making a decision. When in doubt, save more than you anticipate to spend on a down payment to cover any unexpected fees or taxes.

4. Raise Your Credit Score

Keep in mind that the best car lease terms apply to well-qualified customers, which means you’ll get a better deal if you have excellent credit. If you have a few dings on your credit report, a poor credit score could cost you a good lease deal. While you save for a down payment, continue to make timely debt payments and avoid opening new lines of credit so you can raise your credit score before you head to the dealership.

5. Visit a Dealership and Sign a Lease

Once you’ve done your research and accumulated your down payment, you are ready to visit the dealership. Even if you have narrowed your search to a specific make and model, you’ll want to give the car a thorough test drive to make sure it meets all your expectations. Take time to sit in the car and check out all the instruments. Just because it’s new doesn’t mean everything works.

Drive the car long enough to get a feel for its drivability and check out its performance both in the city and the highway, if possible. Listen to the engine and get a feel for how the car steers and brakes. If it doesn’t meet your expectations, don’t sign a contract to lease it.

Up Next: 5 Things to Never Tell a Car Salesman If You Want the Best Deal

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About the Author

Mike Parker

Mike Parker is an award-winning freelance writer, editor, publisher and film producer. A serial entrepreneur with business interests in the fields of music, television, theater, film and publishing, Mike has written for such national print and online publications as Vibrant Life, Home & Health, HomeLife, AZCentral, Chron, Clarity, SF Gate and Crosswalk.

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How to Lease a Car
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