According to statistics, millennial car owners are more likely to opt for leasing instead of an outright purchase. In 2015, 29% of car purchases made by millennials were rentals, which was an increase of 46% on car leasing by the same demographic over a five-year period. Why is car leasing so attractive to the younger generation?
A defining characteristic of millennials is their passion for flexibility and options. From gadgets to streaming services, an individual below the age of 35 is willing to pay monthly amortizations only to gain access to the latest technology. This observation correlates with the reason why car leasing is on the rise, especially with someone who does not have the money to pay for an upfront deposit. If you get a 0 down lease deal, it means you can walk out of the dealership with a brand-new car without paying a hefty amount.
But before you go down to the nearest car dealership and negotiate a lease on the latest BMW or SUV, consider the following tips on how to lease a car wisely.
Decide how much you can pay monthly, and stick to it
For someone who has a new job and is still paying off student loans, keeping a strict budget is essential. Whether it is a no money down car lease or not, your monthly payment should not exceed 20% of your net salary. There are lease calculators available online so that you can figure out a sensible amount that will fit your monthly expenses.
Commit to the mileage requirements
One of the caveats of leasing a car is the strict mileage requirements. But if you intend to use the vehicle mainly for traveling to work, you will be fine. A typical three-year lease will include more or less 12,000 miles. If you exceed the limit, you will pay for the excess. If you feel that you might end up going above the cap, check if there is an option to buy mileage upfront.
Research and compare prices
Do not settle for an offer with the first dealership you find. Take time to call several companies or check online zero down lease deals and other offers from multiple leasing companies. Compare quotes and find out if paying a down payment saves you money in the long run. You also have more leverage if you are not physically in the dealership. Car leasing companies are more willing to give you a better quote when talking to you on the phone, or online, to win your business.
Negotiate the terms of the deal
Once you have at least three deals you are considering; it is time to start negotiating. It is a myth that you cannot haggle the price of the car suggested by the manufacturer. It is also essential that you know all the fees you need to pay so that you can work on a more attractive deal before you close it. The lower the monthly payment, the better it will be for you financially throughout the term of the lease.