If you’re in the market for a new car and trying to finance it through leasing, you’ve probably heard that the global shortage of semiconductors has caused several automakers to raise their lease prices. While these increases typically affect luxury models, lease prices on mid-range brands like Hyundai and Kia have also seen a spike.
This is part of a much bigger story about the trend for consumers to opt for higher trim levels in order to get the latest technological features, but automakers are feeling the pinch of component price increases nonetheless.
You may not think of tiny chips as a big deal, but they’re the reason that automakers can’t produce enough cars to keep up with sales. To stay in business, they have to raise prices.
So Instead of just going up a few dollars, car leases have gone up by over 20 percent over the last year – and that’s on top of a decade-long trend of higher prices.
Car Leasing Companys and Dealerships stand to lose
The price of a new car is dictated by the manufacturer – they determine the model, the extras, and the price. The leasing company then takes that price and offers it to you with different terms, such as length of contract and money down payment.
The increase in vehicle prices has also been marked by longer lease contracts, so if you’re buying or leasing this year you’ll likely be paying more upfront than last year’s car customer – even if the real dollar figure is smaller.
So how can you save?
- Work on your credit score – The better your credit score the more flexible the leasing company can be with your leasing terms
- Low mile leases – If you choose a car lease that allows 8,000 miles per year instead of 12,000 you can reduce your monthly payment (but be careful not to go over)
- Trade-ins: You can trade in your old car to knock off some of the prices from your car lease, if you have an old car that you no longer need, trade it in!
- Down Payment: Any amount that can you can offer up front as a down-payment can lower your lease payments
- Extend your lease: The longer your lease is, the less the monthly payments will be. Try going for a 5-year car lease.
Car leasing does not have to break the bank, Lease from the most reputable car lease company in NYC if you want to save:
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