Reply to Tell me about leasing a car. Never done it and need advice.

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[quote=Anonymous]When you are leasing, don't focus on monthly payments (that will only distract you from the actual values of importance).  The monthly lease is calculated as follows based on the depreciation [(New Price) - (used value)] during the lease:

depreciation / (length of lease in months) * (money factor which is based on the interest rate).

The used value varies slightly based on how many miles you expect to drive during the lease, but the used value, length, and money factor are otherwise fixed.  So you should treat a lease  negotiation like a buying a new car and try to negotiate the new car value as low as possible.  The dealer markups, taxes, and dealer processing fees are added to the "new price" while a down payment and dealer incentives is deducted from the "new price".  So if you lease a car that is marked up (like a Jeep Wrangler that are currently marked up on average by 8500 over msrp), your lease is going to be very high because you will have to pay for this markup through your lease (about 8500/36 or $236 per month over a three year lease just to cover the markup).

Don't get fooled by very low advertised leases (VW is notorious for this) because it generally includes a significant down payment to lower the monthly lease prices.  [/quote]

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