How to Get the Best Car Lease
Tips for reading lease ads, comparing offers, and saving money
Deputy Content Editor, Autos
Updated April 3, 2025
There is a lot of appeal to leasing a car. For example, with a lease, the monthly payments are usually less than financing a new-car purchase, the down payment is often minimal, and the vehicle is typically brand-new and covered by a manufacturer’s warranty.
Leasing also has the benefit of locking you into a predictable monthly cost and removes long-term worries about depreciation. If you finance a car and have to sell it before the loan is paid off, you run the risk of owing more on the loan than the vehicle is worth, or being “upside down.” With leasing, you’re protected from midcontract depreciation changes. Your contract also outlines the vehicle’s buyout price at the end of the lease.
With prices expected to increase with increasing tariffs, you might find that the buyout price is a great deal in two or three years, potentially saving you thousands of dollars. If not, there’s no harm, though you may be compelled to start another lease at the latest prices.
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- Subsidized Leases What You Can Negotiate What to Watch Out For Final Checks When the Lease Ends Tips to Minimize Expenses
While leasing has distinct benefits, there are also numerous potential pitfalls. Keep in mind that there’s no free ride. Our tips can help keep you on the right track.
Like a car loan, a car lease can come from an automaker or a third-party lender, and it’s usually arranged through a car dealership. Just as with a loan, you can get prequalified for a lease. It makes sense to do that if only to form a basis for negotiation with a car dealer.
More on Car Leasing & Buying
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As car prices remain high (more than $48,000 in February 2025), leasing a new vehicle is an alternative.
The predictability of the payments and ownership costs (no expensive repairs when under warranty!) has its appeal. But life can be unpredictable, and a lease has less flexibility than a purchase.
To help you save money on your next lease, we take a look at the different ways a lease offer that sounds reasonable could end up being more costly than you thought it would be.
See our car buying advice for more guidance on getting the best car for your money.
Subsidized Leases
Automaker leases are sometimes subsidized, or “subvented.” The automaker can take money off the top, with an extra rebate just for lease deals, or it can raise the residual or both. Either way, that reduces the depreciation that the lease must finance. Occasionally, a subvented lease can bring a below-market money factor, but that’s uncommon. You can unearth these special lease deals by checking the websites of automakers and local dealers.
The cheapest deals are subsidized leases offered by an automaker’s finance arm—Ford Motor Credit, Ally (which handles financing for GM and Chrysler products), Honda Finance, and so on. Many automakers also factor in tax credits for EVs to lower lease prices.
Be aware, though, that a lot of these leases are inexpensive because the automaker is trying to clear the decks of slow-selling cars. So that sweetheart deal might not be for a car you actually want. And the special deals may be available only to customers with top credit scores. But with lending standards looser than they were a couple of years ago, don’t assume you won’t qualify.
What You Can Negotiate
Buying and leasing have one thing in common: You should first negotiate the price of the vehicle. Only after you have a firm price should you discuss leasing. After all, it’s a form of financing.
Whether you’re comparing leases or evaluating a single offer, pay particular attention to the lease interest rate, aka the “money factor.” This is a small decimal fraction, often written out to five places, such as .00166.
To convert a money factor to its equivalent percentage rate, multiply it by 2,400. Thus, a money factor of .00166 multiplied by 2,400 is the same as a 4 percent annual percentage rate. To go the other way, divide by 2,400. An 8 percent annual percentage rate would convert to a money factor of .00333.
Lease rates are often lower than an equivalent loan’s interest rates. Lease contracts are also less risky for a finance company. Because the finance company legally owns the car, it’s easier to repo
