A sign-and-drive lease involves putting money down to lease a brand-new vehicle for two to three years. Leasing generally has lower monthly charges compared to the higher monthly payments required to purchase a car. Every lease deal is different, but most include mileage limitations, credit score minimums and a down payment of $2,000 to $3,000 due at signing. The renter must return the vehicle at the end of the lease.
As of October 2014, nearly 50 non-luxury vehicles can be leased from several automakers. The monthly rate for many models is $199. Monthly mileage limits range from 833 to 1,000. Drivers are charged between 15 to 25 cents per mile over the annual limit. Leases typically last 24 to 36 months although some go for 39 months.
No-money-down agreements have higher monthly payments. For instance, one deal allows a driver to lease a car for $280 per month for 36 months with no money down or $199 per month with a down payment of $2,600. Over the three-year lease, the renter owes $10,080 with no money down versus $9,764 with the initial down payment. Those who sign the lease must also pay taxes and registration fees.
Most leases are for base vehicles with no added options. At the end of the lease, customers can lease another new vehicle for two to three more years.