Rent or buy? It’s a long-standing debate among people looking to buy a new car. With a purchase you have no time or mileage limit, but if you want to upgrade in a few years, you will have to haggle over a trade-in or sell price. Leasing takes all the mystery out of the equation, and when the lease is up, you can move on to something new. But mileage limitations can sometimes be tough to deal with.
This is what makes Lincoln’s new lease so strange. The average person drives between 12,000 and 15,000 miles per year, and that’s what most leases offer. Low mileage leases at 10,000 or even 7,500 miles are also quite common, offering a lower monthly cost in exchange for less wear and tear on the vehicle. However, Lincoln now has a 5,000 mile per year lease plan. This further lowers monthly rental payments, but you can exceed the annual limit in a single week of vacation across the country. Is a lower payment worth such a restriction?
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Cars Direct learned of this lease agreement through communication with the dealer, and crunched some numbers. Going to 5,000 miles, it is said that the residual value of a vehicle would increase by 5%. For example, Cars Direct uses a 2020 Navigator reserve and three-year term to determine the payment would decrease by $ 110. Yet it is $ 808 per month versus $ 918 and frankly we have a hard time seeing why anyone who can afford $ 800 a month wouldn’t go to $ 900 for a lot more mileage.
After the publication of this report, Cars Direct learned that Lexus also offers a 5,000 mile lease option. It looks like these deals are likely aimed at an older demographic who just don’t drive much, like the legendary little old lady who only goes to church on Sundays. It’s certainly an intriguing concept, but with penalties of $ 0.25 per mile above the Lincoln limit, costs could rise in a serious hurry up if you suddenly have to drive more than you expect.
What do you think of this very low mileage lease? Is it just a gimmick or something that might work well for the right person?