Nowadays leasing is a global process that connects different things. Depreciation, semiconductor shortage, sharing economy, and money-saving became the terms that we associate with leasing. Is leasing a smart decision? Why is now the best time to lease a car?
We will answer all the questions.
What is happening with the market now?
After Covid-19 crisis, the auto industry suffers from serious issues. The biggest problems are chip shortage and factories closures.
The prices are higher than ever and it bacomes impossible to drive a new car. However, new models are coming soon and the world is ready for the situation improvement. Drivers can call it the best time to lease a car because of special offers and unusual conditions. Customers opened the opportunity of trading their car in and getting some profit.
Moreover, leasing as a car sharing service becomes a part of gig or sharing economy. It is a global trend of using less things with harmful impact on the nature, so the society joins it with enthusiasm.
Leasing a new vehicle allows you to enjoy a more expensive car than you may be able to afford. A leased car has the latest driver technology for the price of monthly lease payments.
Leasing is mostly based on the predicted value of the car at the end of the contract. It is named residual value and it plays an important role here. Subsequently, turbulence in the world is the reason why it is difficult to know what the car will be worth in three years.
*Residual value is the final price of the leased car at the end of your deal. Your personal assistant will help you to calculate it. For example, if your lease contract is 36 months, the experts will consider the depreciation and tell you the price of a car in 3 years. This number is the residual value of a leased auto.
With a lease, you don’t have to worry about market fluctuations. If the value of the car unexpectedly drops, it’s the lender’s problem, but not yours.
In fact, here is the tip for you. If the car’s value is unexpectedly high at the end of the lease, you have the option to buy the car yourself and can possibly make money by selling it.
Pandemic took us to the point when we cannot predict the next few years.
People worry about job security and their finances, so the commitment of a car purchase now seems not so appealing.
Instead, car owners are leaning toward something flexible, reliable, and not risky.
Now leasing offers short commitment with a contract agreement according to your most exquisite needs.
After the semiconductor shortage breakdown at the beginning of this year, the automotive industry is still recovering. The chip shortage affected the biggest manufacturers and most of them were not ready for this.
Some factories were shut down for some time and the dealerships faced a lack of supplies.
As a result, the prices began rising rapidly, making it the best time to lease a car. More to that, the choices are quite limited and incentives from automakers tend to dry up.
You have to think if you need everyday car driving. Maybe, 6 000 or 8 000 miles per year will be enough for you. Thus, you will be able to make more cost-effective decisions.
Mileage restrictions are included in the lease agreement. If you go under the normal amount, your lease cost may reduce and save your money.
Moreover, you make a useful impact with a traffic issue. The fewer cars emit carbon dioxide, the more we help the planet. As a result, it is the point of leasing and environment connection.
In fact, lease monthly payments are much lower on the market for the same car compared to buying one. However, you can also get a bargain leasing a car shortly after the model is introduced.
That is because the residual value is generally at its highest point. Therefore, you can save more money on depreciation.
Residual value is one of the most critical factors. Banks and leasing companies consider it when they determine how much to charge customers for the car they are about to lease.
Often leasing more expensive cars can cost less to lease than budget economy cars. In general, it is connected with the depreciation level.
The luxurious fleet, modern features, and reliable manufacturer’s warranty can be available for everybody. The loss in car value, as previously explained, makes up a big portion of your lease payment.
This time is not always certain and depends on the market situation. New models which are coming, growth of popularity, manufacturer’s incentives will be useful to check.
Consider leasing a car when it has just been released. Cars that are new in the market keep their residual value at the highest point which means you will pay less than usual. The depreciation will work on you in this best time to lease a car.
However, you should be attentive because new models can be too popular. It complicates the negotiation process. You will not be able to keep the price lower than MSRP in case of high demand.
Commonly, there are some special days to lease a car.
Firstly, holidays became good time for brokers to hold sales. Thus, you should be an active customer during the winter holiday season, Memorial Day, Labor Day and July Fourth weekend.
Secondly, consider the end of the month or quarter to lease a car. The dealers provide good bonuses and you will find appropriate offers.
If you already have the needed parameters, you may calculate your lease ahead of time or click here to contact us! GPM experts will answer all the questions and explain the tiniest details of your future deal in order to make it simple and transparent.
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