Look, we know: new cars are expensive. Last year, the average buyer paid more than $34,000 for a brand new ride, and with all the safety and infotainment upgrades available in today's showrooms, there's little indication that that figure will go down anytime soon.
As if that weren't bad enough, trade-in prices are tumbling, too. There's a glut of used cars on the market, meaning that dealerships aren't shelling out as much as they once did for used vehicles.
Combined, the rise in new car prices and the drop in trade-in values have forced many consumers to explore at other options apart from buying outright. Among the most popular alternatives is leasing, but before you sign on the dotted line, we suggest you do some math.
The folks at CarsDirect recently ran some numbers on leasing options and discovered, to no one's surprise, that some deals aren't the bargain they appear to be.
That's mostly because of up-front payments. For example, a $199 lease on the GMC Terrain sounds like a super deal. But CarsDirect found that the up-front was a whopping $4,629. Over the course of a 36-month lease, the effective price on the Terrain works out to be $392.
Time to consider some alternatives. With a monthly lease payment of $299, the Acura RDX might not seem as attractive as the Terrain. But the up-front payment for the RDX is just $3,299, making its effective monthly cost $391.
Even cheaper is the Nissan Murano, which has a $259/month lease but an effective price of $331 because its low up-front payment. That's more than $60 cheaper than the Terrain, and nearly $2,200 less to pay over the course of the lease.
The site ran similar numbers on the Ford Fiesta and the Chevrolet Cruze, finding that on lease, those cars can cost more than much pricier models, including some crossovers.