The best time to lease a car has everything to do with timing. When it comes to getting the best bang-for-buck lease payment I recommend that you don’t worry so much about the lease terms and jargon, such as residual value and money factor. Of course these two things do play a very important role in determining your lease payment, but these are not things you can control, yourself. All you care about is getting the car you want with as low of an effective car payment possible, right? For further explanation on this, see my article on Lease Value Ratio.
Your dealer’s finance department wants you to buy or lease a car and getting the numbers to work in your favor is their responsibility. The reality is that timing affects both the dealer’s and car maker’s willingness to make you an aggressive car lease offer. This is where timing comes in. Timing is all about incentives. When the car maker or dealer have excess inventory or need to get cars off their lots, their incentive increases dramatically and that means big savings for you on your payment. Timing and circumstances affect the car payment more than anything.
Timing a Car Lease Just Right
When incentives from the dealer or car-maker come into play, this usually results in what is called a subvented or subsidized car lease. The biggest discounts resulting in these kind of ultra-low car lease payments usually come right at the end of a car model’s lifecycle. Newly, designed car models usually come out every 4 years. The new models are usually introduced between August and October. Meanwhile, dealers still have the previous, end-of-life-cycle models on their lots and are usually very anxious to get rid of them. Here is where the basics of economics and supply and demand come into play. Naturally, the newer cars with the latest look and technology are in higher demand. While they have similar MSRPs, the newer cars are much more expensive to lease. To give you a real-life example: A few years ago, in the early fall of 2013, I leased a $25,000 Honda Accord SE for under $200 a month. The similarly equipped, newly redesigned 2013 LX model would have cost me around $350.00 even though it had a lower MSRP. The best time to lease a car is usually in the fall at the end of the car’s design lifecycle.
Buying a Car at the end of the Model Life Cycle
If the best time to lease a car is at the end of the car’s design lifecycle, then it makes sense that the same thing applies to buying the car as well. As mentioned above, it is the dealer’s responsibility to make the numbers work in your favor. With leasing, the finance manager might be able to play with money factors and residual values along with application of rebates, etc.. When buying a car, the dealer is a little more restricted about what they can do. They can apply rebates and give you as low of a sales price as possible. They might also have some room to work with you on the interest rate if you are financing the car. Either way, the numbers work in your favor when the timing is right.