When Is the Best Time to Lease a Car?

Getting a great deal on a car lease can be influenced by the time of the year, holidays, and other factors. Having a good credit score also plays a role in the price you’ll pay and the interest rate you’ll get.
 
For over 60 years, Credit Union of Southern California (CU SoCal) has provided quick pre-approvals, no application or funding fees, and other great benefits to our valued Members.
 
Call CU SoCal at 866.287.6225 to schedule a no-obligation loan consultation, or apply online today!
  

Read on to learn more about what time of the year is best to lease a car.


How Does Car Leasing Work?

The main difference between leasing and purchasing is that when you purchase a car it becomes yours once the car loan is paid in full. With a lease, when the term ends, the vehicle has to either be returned to the leasing company or purchased for the residual value. Learn more by reading, How Does Leasing a Car Work and is it Ever Worth it?
  

Best Time of the Year to Lease a Car

Here are the times when you’re likely to find the best deals on a car lease:
 
1) When a New Model Comes Out: According to Realcartips.com, generally, the best time to lease a car is shortly after the model is introduced. That's when the residual value will be the highest - meaning you'll likely save money on the depreciation cost. The residual values are usually based off the Automotive Lease Guide's Residual Percentage Guide which is updated every two months.
As the model year progresses the residual values trend lower.
 
If you were to lease a car for 36 months towards the end of its model year, the car would be considered a four-year-old vehicle when you turn it in. That means you're going to be paying an extra year's worth of depreciation. Most new models are introduced between July and October, so this is the time that you should try to lease to maximize your savings.
 
2) Holidays: Lease shoppers can find special dealership incentives during long holiday weekends, including President’s Day, Memorial Day, July 4, Labor Day, and Thanksgiving. Savvy shoppers will want to weigh the potential savings during these events against the timing of Residual Value, as mentioned above.
 
3) End of the Month, Quarter, or Year: Car dealerships work hard to meet sales targets at the end of each month, quarter, and year. There could also be manufacturer-sponsored leasing and financing deals available at these times. If the timing is right for you, you may score extra savings.
 

Tips for Getting the Best Car Lease Deal


Check Your Credit Reports

The three major credit bureaus (Experian™, Equifax®, and Transunion™) gather information about your credit payment history and use this information to generate your unique credit report. Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company every 12 months. Carefully read your credit reports to see if there are any errors. You can dispute errors in credit reporting for free (you do not need to hire a special company to dispute errors). CU SoCal provides free real-time credit scores and credit report to all Members through Credit Score and More in our Digital Banking platform.
 

Improve Your Credit Score

In addition to correcting credit report errors, and paying loans and credit card debt on-time, there are other steps you can take to improve your credit score:
 

Avoid credit “hard inquires”

A hard inquiry is done any time you apply for a new credit card. Also, don’t close old credit accounts even if you’re not using them. Having open credit lines that you no longer use will improve your “credit utilization score.” Credit utilization accounts for 30% of an individual’s FICO score.
 

Comparison Shop

Car dealerships are always providing incentives to move cars off the lot and they know that today’s savvy shoppers are looking for the best deal. When you know which make and model you want, don’t be afraid to shop around and negotiate.
 

Be Aware of Fees

As with a car purchase, a lease will include documentation, tag, title, registration, and license fees. Leases may require the following up-front costs: acquisition fees, security deposit, disposition fee (for handling the vehicle after it’s turned in), sales tax, and first month’s payment. Before you sign, ask your salesperson what fees you will be required to pay.
 

Understand Important Lease Terms

There are several leasing terms you should be familiar with, including acquisition fees, adjusted capitalized cost, and more. More information can be found at Consumerreports.org.
  

Leasing Vs. Buying a Car

There are advantages and disadvantages of leasing vs. buying a car. Here are some of each to consider:
 

 Advantages of Leasing a Car:

  • Lower down payment. Putting more money down on a lease doesn’t save you money as it would with a car purchase. This means you can put less down and keep money in the bank.
  • Lower monthly payments. Lease payments tend to be lower because you’re essentially “renting” the car vs. paying more to purchase.
  • Get more for your money. Because monthly payments are generally lower than monthly car purchase payments, you may be able to afford a higher-end model that would normally be too costly to purchase
  • Avoid costly repair bills. At the end of the 2-4 year lease term, you’ll return the car to the dealership, thus avoiding high-mileage repairs to the engine or transmission that are common with older cars.
 

Advantages of Buying a car

  • Build equity with ownership. Assuming you use a car loan to make the purchase, when the loan is paid-off you own the vehicle. This means you can still make money by selling it or getting trade-in value.
  • Sell any time. Even if you still owe money on a car loan, you can sell the car and pay off the balance of the loan. Most leased vehicles will cost you a penalty for early termination of the lease contract.
  • No mileage limit. Leased cars have a mileage limit and you’ll pay extra if you exceed the limit.
  • Customizable. If you like to customize your cars, you can do so with a car you purchase. Cars that are leased cannot be altered by the lessee.
 
Still not sure which option is best for you? Check out "Pros and Cons of Leasing vs. Buying a Car."
 

Is Leasing a Car Worth it?

That depends... if you plan to keep the car short-term and can meet all of the lease agreement terms, especially the mileage agreement, then yes, leasing can be worth it.
 
Many people prefer to lease because leasing allows them to have a brand new car at the end of every lease term, typically every two to three years.
 
After you’ve done your research and crunched the numbers, the best way to choose between leasing and buying is to go with the option that works best for you driving style and your budget.
  

CU SoCal Auto Loans

Drivers who opt to buy a car vs. lease can be confident they’re in good hands with an auto loan from CU SoCal. Our auto loans feature:
  • Up to 120% financing for new and used vehicles.
  • Quick pre-approvals.
  • Extended terms up to 84 months for the lowest possible monthly payment.
  • A personal auto-buying concierge service.
  • Low-cost loan protection add-ons.
  • No application or funding fees.

 
Click here for more details on CU SoCal auto loans.
 

Why Savvy Consumers Choose CU SoCal

For over 60 years CU SoCal has been providing financial services, including car loans, personal loans, mortgages, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
 
Please give us a call today at 866.287.6225 today to schedule a no-obligation consultation with one of our auto loan experts.
 
Apply for a vehicle loan today!
 

Building Better Lives

Credit Union of Southern California (CU SoCal) is a leading financial institution empowering those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County to reach their goals and build strong financial futures. CU SoCal provides access to convenient money management services and offers competitive rates and flexible terms on auto loans, mortgages, and VISA credit cards—turning wishing and waiting into achieving and doing.

 

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