Online leasing has some advantages depending on what kind of shopper you are and what type of shopping experience you prefer. The process isn’t all that different from leasing in the business office of a local dealership. You’ll wind up in about the same place as an in-person deal regarding terms and monthly payments. Even online, you can still take advantage of whatever leasing deals the manufacturer may be sponsoring. However, leasing online can make some aspects of car-buying, like test drives, trickier.
Read on for tips for online car leasing and learn what to expect.
Pros and Cons of Leasing Online
Step One: Do the Math
Step Two: Create a Dealer Relationship
Step Three: Review Every Detail Carefully
Step Four: Get a Written Lease Offer
Step Five: Apply for the Lease
Step Six: Complete the Paperwork
Step Seven: Coordinate Delivery
Pros and Cons of Leasing Online
If you’re looking to lease a vehicle, chances are you’re already doing most, if not all, of the prepurchase research online. Why not take the next step and do the entire deal online? Leasing online comes with some distinct advantages and a few downsides. These include:
| Pros | Cons |
| Many dealerships now offer in-depth video car tours that you can view online. | Depending on where the dealer is located, you may have to forgo a test drive. |
| You can juggle offers from multiple dealers at once. | Sometimes, too many options can be overwhelming. |
| Car can often be delivered right to your door. | If you lease from a distant dealership, it can complicate your drop-off when it comes time to return the car. |
| Removes some stress and frustration because you can move at your pace rather than the dealer’s. |
Step One: Do the Math
Monthly lease payments are usually less than loan payments when financing a car. However, you should check the math for your situation. Use our lease payment calculator to help determine monthly financing costs. Most new-car dealers offer leasing deals on virtually every model. They publish the details, upfront costs, and monthly payments on their websites. Make sure the math works for your budget.
Also, double-check the insurance coverage the leasing company requires. Minimum insurance requirements for leases are often higher than those for auto loans. You should also consider guaranteed asset protection, commonly known as GAP insurance. This type of insurance product covers the difference between what you owe and what the vehicle is worth if it is stolen or declared a total loss after an accident. While your regular comprehensive and collision car insurance generally pays the vehicle’s actual cash value, that amount may be less than what you still owe on the lease. GAP insurance can save you from having to pay the difference.
MORE: Visit our Car Affordability Information Center for more car-buying information, resources, and tools.
Step Two: Create a Dealer Relationship
It’s possible to go through the entire leasing and financing process online without direct contact. Many of us buy things online every week, bypassing any human interaction. However, you’ll probably have a question or two when acquiring a new vehicle. Establishing a personal contact at the dealership makes good sense.
Many dealerships have at least one team member specializing in online purchasing and financing. You can determine who that person is by calling, chatting, or emailing the dealership. Contact the sales manager if the dealership doesn’t have a dedicated online specialist. Inform the manager you’re shopping, leasing, and financing online, and ask for the contact information of a person qualified to help you with any questions.
Step Three: Review Every Detail Carefully
Because you aren’t visiting the dealership, you’ll need to be more cautious and double-check everything. Just because a car is on the dealer’s website doesn’t mean it’s actually in stock. The dealer may have sold it the previous day, or it could be arriving next week on a transport truck.
Whichever model you choose, have your contact person email the car’s vehicle identification number (VIN) to you. The VIN is a 17-character combination of letters and numbers unique to that vehicle. It appears in several locations around the car, but the most accessible location is on a plate on the dashboard at the bottom of the windshield on the driver’s side.
In addition to the VIN, ask for a copy of the Monroney label, the window sticker displayed on every new car. It contains a list of the standard equipment, the base price, options and their costs, the manufacturer’s suggested retail price, and the destination fee. It also displays the VIN. Your dealership contact can email you a copy of the Monroney.
Step Four: Get a Written Lease Offer
Ask the dealership to present its offer in writing via email. The offer should include:
- The transaction cost of the car with all fees
- The terms of the lease with all upfront costs
- The lease’s money factor
The money factor is lease-speak for the number used to calculate the lease’s finanacing charge, similar to an interest rate. It may be displayed as a decimal, such as 0.002. to estimate the equivalent annual percentage rate, multiply the money factor by 2,400. A money factor of 0.002, for example is roughly equivalent to a 4.8% APR. Knowing the money factor helps when cross-shopping leases.
When it’s time to sign the paperwork, be sure all the numbers on the lease agreement match the written offer. You should also double-check that the VIN on the paperwork matches the one on the offer and Monroney sticker.
Step Five: Apply for the Lease
You will need to lease through the dealership to get any leasing deal a manufacturer offers. However, you’re free to shop around for a better leasing deal. Online leasing brokers, banks, and other lenders may offer car leases.
Leasing is a little more involved than financing with a loan. When comparing car leases, you need to consider more than simply the monthly payment. Before making a leasing decision, always get a list of all the upfront costs, deposits, fees, and the money factor. You can negotiate some aspects of your lease.
Another term unique to leasing is “capitalized cost reduction,” which is any amount that reduces the amount used to calculate lease payments. Down payments and trade-ins are examples of capitalized cost reductions. To evaluate any lease offer, you need to know the capitalized cost reduction amount.
Step Six: Complete the Paperwork
If you don’t want to go to the dealership or another leasing entity to complete the paperwork, they may send someone to you. Alternatively, it might send the documents by overnight mail. Establish how you’ll complete the paperwork early in your conversations, emails, or chats with the lessor.
We recommend completing the paperwork in person if the dealer is local or within an easy drive. This allows you to inspect the vehicle if you haven’t done so already. You can check the VIN and verify other details before signing the paperwork. Be sure to call ahead and make an appointment to see the car and finalize the paperwork if you choose to go in person.
Step Seven: Coordinate Delivery
Delivery is another aspect of the lease you should clarify early in the shopping process. If the dealership is local, it may have a procedure for delivering the car to your home or workplace. You can also choose to pick it up yourself at your convenience. If the dealership isn’t local, you’ll need to arrange a transport service to pick the vehicle up and deliver it to you. Your dealership contact can probably help organize long-distance delivery if necessary.
Editor’s Note: We have updated this article since its initial publication. Russ Heaps contributed to the original report.