Car lease online: what you need to know

A hand holding a car by a computer.
A hand holding a car near a computer.

Online leasing isn’t all that different from leasing in a local dealer’s office. You end up in about the same place as a personal deal regarding terms and monthly payments. Even online, you can still take advantage of the leases that the manufacturer may sponsor.

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

Why lease a car online?

Approaching the task of getting a new car the right way, you’ll do most, if not all, of your pre-purchase research online. Why not take the next step and do the whole deal online?

Many of us have developed our online shopping skills well beyond simple research during the pandemic lockdowns. If you’re willing to forgo the test drive (not a particularly good idea), you’ll never have to step into the dealership until you pick up the vehicle. Many dealers will deliver your new car to your door. Some dealers will even bring a car to your home or work for a test drive.

Leasing or buying a car online takes away most of the stress and frustration that often comes with car shopping. Things move forward on your timeline rather than at the dealer’s pace. You can pause to think about the process, digest the information, and move on to the next step when you’re done.

Plus, you can juggle offers from multiple dealers at once without ever leaving your seat.

Once you’ve located the vehicle, look for a tab that will take you to financing options or “calculate your monthly payment.” Choose “Leasing” and refine the numbers. Many new car dealers offer special lease agreements that are usually sponsored by the manufacturer. You must lease through the dealer to take advantage of such offers, but you can also offer your lease to third parties.

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 help determine monthly borrowing costs. Most new car dealers offer leases for almost any model. They publish the details, upfront costs and monthly payments on their website. Make sure the math works for your budget.

In addition, check the insurance coverage required by the leasing company. Minimum insurance requirements for leases are often more than when financing a car 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 a total loss is written off after an accident. While your regular comprehensive collision insurance policy will only cover the current book value of your vehicle, it will not cover the outstanding balance of your financing. GAP insurance saves you paying the difference.

Create a dealer relationship

It is possible to go through the entire buying and financing process online without voice contact. Many of us buy things online every week, bypassing human interaction. However, you will likely have a few questions when purchasing a new vehicle. Making personal contact with the dealer makes sense.

Many dealers have at least one team member who specializes in online purchasing and financing. You can determine who that person is by calling, chatting or emailing the dealer. If the dealer does not have a dedicated online specialist, contact the sales manager. Inform the manager that you shop, buy and finance online, and ask for the contact details of a person qualified to assist you with any questions.

Go over every detail carefully

Since you don’t visit the dealer, be more careful and double check everything. Just because a car is on the dealer’s website doesn’t mean it actually belongs to current stock. The dealer may have sold it the previous day, or it may arrive on a transport truck next week.

Whichever model you choose, have your contact email the vehicle’s Vehicle Identification Number (VIN) to you. The VIN is a 17-character identifier (consisting of capital letters and numbers) that is unique to that vehicle. It appears in several places in the car, but the most accessible place is a plaque 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 decal, the window decal that appears 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 dealer contact can scan the Monroney and email it to you.

Receive a written rental offer

Two hands of laptops exchange a car for money

Two hands of laptops exchange a car for money

Also ask the dealer to present their offer in writing via email. The offer must contain:

  • The transaction costs of the car with all costs
  • The terms of the rental agreement with all costs incurred in advance
  • The money factor of the lease

The money factor is lease-speak for the annual percentage rate (APR), which acts as an interest rate for the vehicle. This can be displayed in two ways, such as .002 or 2.0. To find the interest equivalent, multiply .002 by 2,400 or 2.0 by 2.4. In both cases, the comparable APR in this example is 4.8%. Knowing the money factor helps when cross-shopping for a lease.

When it comes time to sign the paperwork, make sure that all numbers on the purchase agreement and lease agreement match the written offer. You should also double check that the VIN on the paperwork matches the one on the listing and Monroney.

Request a lease

You have to lease through the dealer to get a lease that a manufacturer offers. However, you are free to shop around for a better lease deal. Online leasing brokers, banks and other lenders offer car leasing.

Leasing is more than financing through a loan. Comparing a car lease includes more than just the monthly amount. Before making a leasing decision, always get a list of all initial costs, down payments, fees, and the money factor.

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

Fill out the paperwork

If you don’t want to go to the dealer or other leasing company to fill out the paperwork, the dealer or leasing company can send someone to you. Or the dealer can arrange it overnight with a postal service instead of sending someone with the paperwork to you. Establish how and who will handle the paperwork early in conversations, emails, or chats with the landlord.

We recommend that you return the paperwork in person if the dealer is nearby or within a short drive. This will allow you to keep an eye on the vehicle if you have not already done so. You can check the VIN and so on before handing over the paperwork. Be sure to call ahead to make an appointment to view the car and complete the paperwork if you choose to go in person.

Bring the car to you

Delivery is another aspect of the purchase that you should clarify early in the shopping process. If the dealer is nearby, they may have a procedure to deliver the car to your home or work. You can also choose to pick it up yourself when it suits you. If the dealership is not nearby, you will need to arrange a transportation service to pick it up and deliver it to you. Your dealer contact may be able to help organize long distance deliveries if required.

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