This Memorial Day holiday season the auto lease deals are back with a vengeance.
As credit scores have rebounded and many auto loan and lease banks evaluate the customer more than the score, even those with short sales and foreclosure are able to get back in the new car game.
The Korean automakers: Hyundai and Kia have leases on their basic four door sedans: Hyundai Elantra, Sonata and Kia Forte and Optima for under $300.00 a month with basic inception fees down. Miles are 10k-12k per year and usually 36 months in term. (oac)
The Big 3 Japanese car companies: Toyota, Honda and Nissan have responded with equally aggressive rates, pushing the Honda Accord under $200/mth for the first time in many years.
But understand this is primarily for the sedan, a more standard, high volume product with better fuel economy, than the small to mid-size SUV or truck, where leases are not as low, noting the lower inventory and thus need for a big lease incentive. The manufacturers have also learned from lease swings of 2008-2010, noting SUV and truck models take a bigger beating and have more deprecation at lease end. The huge value drop pushes the leasing companies to be more conservative with their incentives and residuals so as not to repeat the past and chance getting burned at the auction block three years from now.
While the better lease rates this holiday-summer selling season may be on select imports, the Ford product line is promoting strong lease or auto loan finance rates on the majority of their products, including trucks and SUV’s.
Consumers demonstrate restraint and a conservative car buying appetite this time round.
After riding the roller-coaster of the past few years, those car buyers re-entering the car buying market are showing restraint over excessive features, options and payment. While many have considered a pre-owned version of their former luxury model, others are shifting their wants for needs, and finding satisfaction with great deals that can be had for under $500.00 a month.
Money Down or Trade-in key to new car deal this Memorial Day.
All the banks and leasing companies are requiring more “skin in the game”, so car buyers need to have a couple thousand dollars ready to put down, covering the dealer fees, taxes and registration costs. In some cases, credit union and online approvals will also require any extended service contracts or after-market items be paid for in cash, not added to the loan value.
If you don’t have the cash, but your trade -in has a realistic trade value, (not one inflated by the dealer and added to the selling price of the new car), be sure any state sales tax credit is shown separately on your contract. Not all states offer an equal sales tax credit on the trade to reduce the tax burden of the new car, but where it is allowed, this extra value can easily displace any sizable net return from trying to sell the vehicle private party.*
You may trade a car on a lease, and apply the cash value toward the lease inception fees, however, no sales tax credit applies, in most states. This is because the sales tax on a lease is typically charged monthly. In some cases you may have more equity in your trade than required to cover the lease inception fees, and you should elect to take the excess cash back. It’s always easier to make the monthly payment, than try to get all your cash down-payment back from the leasing bank, if the car is stolen or totaled before the lease comes to term. I recommend not putting down more than the minimum when leasing a vehicle. I am a firm “NO WAY” bidder on One term pre-paid leases for this reason.
Other great leases being offered this Memorial Day include luxury cars like the Acura, Porsche and Jaguar, where a Jaguar XF Turbo I4 can be had for $479.99 a month with $4995.00 down and 10k miles per year.
The 2013 Porsche Boxster has never been offered at such a low payment for only 24 months, but this Memorial Day you can grab one of these hot rag-tops for as little as $489 with 5k down and 5k miles per month for only 24 months! This is a great deal for someone wanting a sexy sports car for weekends or to keep in the vacation palace.
Sarah Lee is an automotive writer, personal car concierge and commercial fleet manager. If you need free advice on your car problem, question, issue, contact her at firstname.lastname@example.org for a confidential conversation.
She has over 23+ years of experience. She writes about Cars, and is a staunch consumer advocate on car related subjects.