The importance of having a car in America today cannot be overstated. According to the U.S department of transportation, about 90% of households in 2017 had at least one light vehicle at their disposal and in a recent Gallup poll among U.S. adults, about 64 percent of respondents claimed to drive daily, while another 19 percent of respondents stated that they would use a motor vehicle multiple times in an average week. With a car still out of range for most Americans, leasing a vehicle has become a viable option for many. This article focuses on zero to $99 car leases no money down payment.
Leasing a vehicle is the use of a vehicle without buying. Instead of paying for the full cost of the vehicle, the buyer makes monthly payments to the tune of the depreciation incurred during the time of the lease, which usually lasts for around 24-36 months. Therefore, the amount you pay for the leased vehicle is the capitalization cost minus the residual value. This is the main reason, many people are choosing to lease a vehicle, you pay for what you use
Some of the terms associated with leasing are: The capitalization cost (Cap cost)-This is the cost representing the value of the vehicle at the beginning of the lease, in addition to any extra fees or cost. The residual value-this is the projected value of the car at the end of your lease based on your expected mileage per year and the terms of the lease. The higher the residual value, the lower your monthly payments. The money factor- this represents the risk taken in trusting you’ll make your monthly payments and is comparable to Annual Percentage Rates (APR)
What Does a Zero Money Down Car Lease Mean?
Contrary to popular opinion, it is very possible to lease a car with no down payment. In a no money down car lease agreement, you won’t be required to pay any down-payment at the start of your lease. This does not, however, mean that the overall value of your lease is changed. The money that would have been paid as down-payment will be rolled over into your monthly payments which means that you will pay higher monthly installments. Honda and Acura are good places to start if you are looking for the cheapest cars to lease with no money down.
There are, however, different types of no money down agreements including;
- No Cap Cost Reduction And No First Months Payment : In this arrangement, the dealer will roll payment for the first month and down-payment into the lease. This means that when signing your lease contract, you will only pay the official fees required by the state.
- No Cap Cost Reduction + First Months Payment : In this lease agreement, you will not pay the down payment, but you will be required to pay the first-month payment and the official fees required by the state
- No Cap Cost Reduction + First Month Payment Made By The Dealer : Here, you pay no down payment and the car manufacturer offers to pay your first-month payment. You only pay the official fees and your overall monthly installments will be lower since the first month’s payment has been waived.
- Sign And Drive : In this agreement, the dealer rolls all your payments; first month payment, official fees, and down payment into your monthly installments and you pay nothing after signing the lease.
To get a zero to $99 no money down car leases, however, you are required to meet certain requirements, the major one being a great credit score. After reviewing your payment history, credit inquiries, credit history, and credit utilization, credit bureaus will allocate you a credit score. A good credit score of, say 800 and above, will make sure you get a no money down lease agreement with no problem.
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Lease or Buy? Which Option Works Best For You
The choice between leasing and buying a vehicle is a tough one. While eventually owning a car that you buy is a big plus for some people, a car is always a depreciating asset and with all the improvements and newer models coming out, you don’t want to get stuck with the same old car. Let’s look at some comparisons between leasing and buying to find out which option will work best for you.
- No mileage, appearance, or reselling restrictions: You own the car and can use it however you like and drive for however long, without penalties or additional fees. Since the car belongs to you, you can also sell the car whenever you like which is not the case when leasing.
- You pay less in the long run: While leasing costs are generally low in the short term, in the long run, you can use the equity you build up in the long run toward the purchase of a new vehicle.
- Lower resale value: A car is a depreciating asset hence you will get a much lower resale value and the hassle of reselling the vehicle will fall on you.
- Higher monthly payments: The average American when buying a financed car will pay monthly installments of around $550 for an average of 5 or 6 years which is higher than monthly payments for a leased car.
- Post-warranty repairs: After the expiration of the warranty on your vehicle, the cost of all repairs will fall on you.
- Lower monthly installments: The monthly installments when leasing a car will generally be lower than when buying a car.
- Upgrading vehicles: When leasing a car, you can easily own the vehicles with the latest technological advancements and depending on your lease agreement, you can always change cars in the middle of your lease.
- Lower repair costs: You will incur little to no repair costs when leasing if you are being covered by your manufacturer’s warranty.
- No worries about reselling: You don’t have to worry about reselling a car when you are on a lease, you just turn in the vehicle at the end of your lease period and get a new one or buy it for the residual amount.
- Penalties: With a leased car, you pay penalties for excessive wear and tear of the vehicle when turning it in, exceeding the maximum upon mileage, and terminating the lease before the expiry time.
- Higher long-term costs: In the long run, leasing a vehicle will often be more costly, since after your lease is up you walk away with no equity.
A car is an ongoing expense that will continue to depreciate and cost you greatly in terms of repairs once your warranty is up. I highly recommend leasing a vehicle, which you can easily upgrade whenever you want.
The Complete Guide To Leasing A Car
Leasing a car can be a tricky experience without knowing what to look out for and the mistakes to avoid. Now that you have decided that leasing is the best option for you, here is a comprehensive guide on how to lease a car.
Step 1: Do Adequate Research
Do ample research on the car model that you want to lease, depending on your use for the vehicle and other personal considerations. Check out the websites of the different car dealerships and see the deals they offer. Compare lease deals from the dealers and decide which one suits you. When you are ready to make physical visits, shop around at several dealers and compare their prices. Dealers have different pricing models and some may be more flexible in terms of negotiation.
Step 2: Take A Test Drive
At the dealership, take a test drive of the vehicle you would like to lease. Pay close attention to the features you find valuable in a vehicle. Check on safety features, comfort, shock absorption, braking and others.
Step 3: Discuss The Price And Negotiate
Talk about the price, though at this point, I recommend that you don’t disclose you are there to lease. Disclose this after you have settled upon a purchase price. Negotiate, negotiate, negotiate. Do not be afraid to negotiate if the price is not favorable to you. It is a common myth that you cannot negotiate at a car dealership, but you can.
Step 4: Know Your Contract In And Out
Find out about all the costs you’ll incur during the lease period. You can easily calculate this using online lease payment calculators to avoid any nasty surprises. You can negotiate a no money down contract where you don’t pay a down-payment though this will increase the cost of your monthly installment. In any case, I recommend not to pay more than $2,000 upfront, since if anything happens to the vehicle after you leave the dealership, no matter how soon, your upfront payment will be lost.
Step 5: Lease Payment
After negotiating your contract, you now have to make sure you make all your agreed-upon lease payments on time to avoid any penalties.
Before you can drive the car home, your car dealer will require you to purchase insurance for the vehicle. You can easily choose a cheap full coverage auto insurance with no down payment. Some of the cheap full coverage auto insurance companies include Progressive, Geico, State Farm, Kemper, Allstate, and SafeAuto.
The Best Zero To $99 Car Leases No Money Down
Hard as it may be to believe, you can lease a vehicle for $99 or even less, monthly payments. Deals like this will require you to pay a high down-payment though and more often than not have short leases, around 24 months, to take advantage of higher residual value. Before entering such an agreement make sure you know if the first payment is being factored into the price.
Here are some of the car you can leases for $99 and below per month
- Honda Civic : You can get the 2017 Civic LX from just $99 per month for 24 months. You will have to pay $3,499 on signing the lease.
- 2019 Kia Soul Base : The 2019 Soul can be leased at just $99 per month for 24 months with $3,500 paid at signing. The payments are exclusive of tax, acquisition and other official fees.
- Chevrolet Malibu : You can lease the 2017 Malibu LS from $79 for 24 months with $3,250 at lease inception. This deal includes an allowance of 10,000 miles per year. This deal also assumes you’ll qualify for a $ 1,500 bonus for coming from a non-GM lease.
- 2021 Hyundai Kona Se Awd : This vehicle is leased for $99 per month for 36 months with $4,399 at lease inception. The payments are exclusive of tax or acquisition fees and interested must qualify through Hyundai Motor Finance.
- 2019 Kia Forte Lxs : This vehicle can be leased for $99 per month for 24 months and $3,500 at lease inception, exclusive of tax, acquisition and other official fees.
- 2017 Traverse Fwd Ls : You can lease this vehicle for $99 per month for 36 months with $7,293 when signing the lease. The payments include tax fees and titles plus lease loyalty
- 2021 Hyundai Elantra Sel Auto : This car leases for $99 every month for 36 months with $2,999 when signing. The payments are exclusive of tax and acquisition fees and interested customers must qualify through Hyundai Motor Finance.
- Chevrolet Equinox : With this lease arrangement, you pay $98 per month for 24 months with $3,530 at lease inception. Apart from the standard $500 factory lease incentive, the dealer is assuming you’ll be eligible for a $1,500 bonus for coming from a non-GM lease.
The average household in America can’t comfortably afford the cost of a new vehicle but are still dependent on an automobile to access their workplaces, educational institutions and other vital services. It is no wonder, then, that there is a gradual shift towards leasing rather than owning a vehicle due to the lower monthly payments. In 2014, leasing’s average market penetration reached an all-time high of 26.5% and as of 2016, leasing accounted for 31% retail sales in the United States.
Leasing offers benefits such as on-demand transportation, mobility, convenience, and independence, that come with having a car, without having to overextend yourself as much in monthly payments. To put it in the words of billionaire oil baron J. Paul Getty, “If it appreciates, buy it. If it depreciates, lease it.”