Car Leasing Online: What You Should Know

By Russ Heaps 05/13/2022 12:00pm

A hand holding a car by a computer.

Online leasing 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.


Read on to get a few tips for online car leasing and learn what to expect.

Why Lease a Car Online?

If you approach the task of getting a new car correctly, you’ll be doing most, if not all, of the pre-purchase research online. Why not take the next step and do the entire deal online?

Many of us have honed our online shopping skills far beyond simple research during the pandemic lockdowns. If you’re willing to forego the test drive (not a particularly good idea), you never need to step inside the dealership until you pick up the vehicle. Many dealerships will deliver your new car to your door. Some dealerships will even bring a car to your home or workplace to test drive.

Online car leasing or buying removes most of the stress and frustration often associated with the car-shopping experience. Things move along at your timeline rather than the dealership’s pace. You can pause to think through the process, digest the information, and move on to the next step when you’re ready.

Moreover, you can juggle offers from multiple dealers simultaneously without ever leaving your chair.

Once you’ve settled on the vehicle, look for a tab that will take you to financing options or “calculate your monthly payment.” Pick “Leasing” and fine-tune the numbers. Many new-car dealers offer special leasing deals usually sponsored by the manufacturer. You must lease through the dealer to take advantage of such offers, but you can also supply your third-party leasing.

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 car 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 website. Make sure the math works for your budget.

Moreover, double-check the insurance coverage the leasing company requires. Minimum insurance requirements for leases are often more than when financing an auto loan. You should also consider guaranteed asset protection, commonly known as GAP insurance. This type of insurance product covers any balance you might have if your car is stolen or written off as a total loss after an accident. While your regular comprehensive collision car insurance only covers the current book value of your vehicle, it doesn’t cover the outstanding balance of your financing. GAP insurance saves from you paying the difference.

Create a Dealer Relationship

It’s possible to go through the entire buying and financing process online without voice 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 e-mailing the dealership. Contact the sales manager if the dealership doesn’t have a dedicated online specialist. Inform the manager you’re shopping, buying, and financing online, and ask for the contact information of a person qualified to help you with any questions.

Go Over Each 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 ensure it’s actually among the current inventory. 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 e-mail the car’s vehicle identification number (VIN) to you. The VIN is a 17-character (composed of capital letters and numbers) identifier unique to that vehicle. It appears in several locations around the car, but the most accessible site is 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 sticker, the window sticker displayed on every new car. It contains a list of the main standard features, the base price, the destination fee, options and their costs, and a total suggested retail price. It also displays the VIN. Your dealership contact can scan the Monroney and e-mail it to you.

Get a Written Lease Offer

Two hands from laptops exchange a car for money

Also, ask the dealership to present their offer in writing via e-mail. 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 annual percentage rate (APR), which acts like an interest rate for the vehicle. This can be displayed in two ways, such as .002 or 2.0. If you want to know the interest rate equivalent, multiply .002 by 2,400 or 2.0 by 2.4. In either case, the similar APR in this example is 4.8%. Knowing the money factor helps when cross-shopping for a lease.

When it’s time to sign the paperwork, be sure all the numbers on the purchase agreement and lease match with the written offer. You should also triple-check that the VIN on the paperwork matches the one on the offer and Monroney.

Applying 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 offer car leases.

Leasing is more involved than financing through a loan. Comparing car leases comprises more than simply the monthly payment. Before making a leasing decision, always get a listing of all the upfront costs, deposits, fees, and the money factor.

Another term unique to leasing is “capitalized cost reduction,” which is any amount reducing the final amount used to calculate lease payments. A down payment or a trade-in are examples of capitalized cost reductions. To evaluate any lease offer, you need to know how much the capitalized cost reduction is.

Completing the Paperwork

If you don’t want to go to the dealership or another leasing entity to complete the paperwork, the dealership or leasing company may send someone to you. Or, the dealership might overnight it with a mail service rather than sending someone to you with the paperwork. Establish how and who will handle the paperwork early in conversations, e-mails, or chats with the lessor.

We recommend that you return the paperwork in person if the dealer is local or within an easy drive. This allows you to eyeball the vehicle if you haven’t done so already. You can check the VIN and so forth before handing over the paperwork. Be sure to call ahead to make an appointment to see the car and finalize the paperwork if you choose to go in person.

Getting the Car to You

Delivery is another aspect of the purchase 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 it up and deliver it to you. Your dealership contact person can probably help organize long-distance delivery, if necessary.