Lease advice/strategy

Considering leasing a vehicle. My first lease. Looking for zero down. I have no plan to buy the vehicle at lease end. I have good credit. Regardless do I just tell the sales person I’m there to lease a vehicle?

Any helpful advice welcome.


Update: As suspected now (December 2021) is not a good time to be a buyer of just about anything. I believe autos are particularly bad. Stock selection was poor. Depending on what vehicle there were "Dealer Adjustments". That's a bounty above MSRP. The local Hyundai dealer wanted $1500 - $3500.

Regardless, I went with Volkswagen's $0 Down, $0 Security Deposit, $0 First Month Payment, $0 Due at Signing. Paid MSRP for a 2022 TAOS SE. 48 month lease. 48 hours after signing; buyers remorse has not kicked in.

Sincerely,

Paying Through the Nose

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Useful auto lease information below
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Leasing Terms:

Open-end vs. closed-end leases
If you’re considering leasing, you’ll want to verify if your terms are for a closed-end or open-end lease. With a closed-end lease, you typically don’t pay any more after you return your vehicle — unless it has excessive wear and tear or you went above any mileage limits.

A closed-end lease means you’ve already agreed on how much the car’s value will decrease during your lease term. If the car is worth less than your agreed-upon amount when you return it, you have no additional financial obligation.

With an open-end lease, the future value of the car isn’t in the contract. At the end of an open-end lease, you may get a refund if the vehicle is worth more than expected. But if the car is worth less than expected, you may have to pony up more cash.

Capitalized cost
Your lease contract can include a number called the gross capitalized cost, which is comparable to the agreed value of the car and services at the start of the lease. The gross capitalized cost includes the value of the car plus the value of any other services and fees defined in the lease.

A related term is capitalized cost reduction. It’s possible to reduce your gross capitalized cost — and monthly payment — by applying a capitalized cost reduction. Capitalized cost reductions are subtracted from the gross capitalized cost to calculate the beginning lease balance — they kind of function like down payments on a lease. If you trade in a vehicle or put cash down, your gross capitalized cost will be reduced by the amount of the capitalized cost reduction.

Residual value
Residual value is the value of the car at the end of a lease agreement. A car that holds its value well has a high residual value. You and the lessor will typically agree to a residual value at the start of a lease agreement, and the car’s residual value will be in the contract.

Depreciation
Depreciation is the rate at which your vehicle loses value over time. If you’re leasing, you’ll pay for the depreciation on the vehicle through your monthly lease payments.

Rent charge
The rent charge — also known as the money factor — is the largest cost of leasing a vehicle and is similar to interest. You can figure out your equivalent annual percentage rate, or APR, by multiplying the money factor by 2,400.

Use tax
There may be a use tax when you take out a lease. In most states, the use tax usually replaces the sales tax that most people pay when buying a vehicle.

Guaranteed Auto Protection (gap) coverage
The lessor may require you to purchase gap insurance, which covers the difference between the amount you owe on your lease and the actual value of the leased vehicle if it is damaged or stolen.

Early termination charges
When you take out a lease, you’re agreeing to pay for the lease for a certain period of time. If you end the lease early, you may have to pay an early termination fee. Your lease agreement should explain what amount you’ll owe if you choose to end the lease before the term is up.

 

Bump, interested as well out of curiosity

 

No money down is going to be tricky. My advice, never lease. The value is only going up on these trucks so if possible, buy and sell when the time comes. Even with tier one credit most dealers will try to make you out something down.

 

The consensus is always leasing is not recommended but out of curiosity let's say you still want to lease, what's the best way to do so. I think that's what OP is asking

 

Thank You

 

I understand. So the approach should be upfront and firm, with a number you won’t budge on. No different than buying. But keep in mind GAP insurance etc when leasing. It rarely makes sense

 

Is zero down on a lease such a thing? I’ve never leased but every ad I’ve seen shows several thousands down on a lease. Monthly payments must be quite high if they do exist.
Update: googled it guess, guess 0 down leases do exist. Would be interesting to see monthly lease fee and final lease closure charges. I also bet there are some fees out the door for a lease.

 

First payment down. My wife leased her last vehicle, 1st month payment only. With the increased values of used cars, the dealer gave her 4,000 at the end of her lease as that’s what it was worth above her lease buyout option price. So it worked out just fine for her. The less down the better, because if the vehicle is totaled, you don’t get that down payment back. Don’t worry about the lease doesn’t make sense crowd. If it works for you, that’s what matters. If you go to a site like Edmonds’s forums, you can get the leasing numbers and figure out the best deal to negotiate. Get the money factor and residual, those numbers are set above the dealer level, then you can use the calculator to plug in msrp and sales price to see the range you can expect. From there, it’s making sure the dealer doesn’t mark up the money factor, and negotiate the sales price that gets to the monthly payment you want. Obviously, current conditions they might not be negotiating like they would otherwise. But you never know

 

what was her GAP ? Monthly payment ? The current market leaves little to no room for negotiation on purchase price, let alone a lease.

 

Her payments were 374. I believe gap was only a few bucks, not a big deal. Like I said, current conditions make deals different, but also depends on the dealer, the area, and the vehicle. OP just asked for advice, as someone who helped my wife get her lease numbers as well as my in laws, I offered what little knowledge I have

 

https://www.edmunds.com/car-leasing/quick-guide-to-leasing-a-new-car.html

 

$374? not on a Tacoma

 

No, I didn’t think op said Tacoma. Although pre 2020 a Tacoma lease would have been in that range. I looked into the lease cost. As they hold their value well, and the majority of the lease payment is the 3 year depreciation, assuming a 36 month lease, it makes the Tacoma a decent vehicle for lease.