Cars Leasing vs. Cars Renting

Although we might use the words “lease” and “rent” interchangeably in everyday conversation, car leasing and car renting are actually incredibly different processes. Car rentals are intended for short-term borrowing only, while car leasing deals typically last for 24 months or longer.

Car Leasing

Some people compare car leasing to apartment leasing, but this can be confusing, since apartment renting and leasing are incredibly similar. It’s better to think of car lease financing as similar to mortgage financing – only instead of money, car leasing companies are loaning you a car.

Just like loan money, you have to “pay back” (or return) your car at the end of the lease. You also have to pay interest on the loan and cover the vehicle’s estimated depreciation in value. This money comes out of your initial deposit and monthly payments.

Car Renting

Whereas car lease deals are calculated based on vehicle value, estimated depreciation, interest rate, and lease duration, car rentals are not determined by any one set of factors. Rental prices vary by company and season by formulas not known to the general public.

Because of the unreliable financing, car rentals are best used by travelers or people in need of specific types of cars for short-term use (i.e., a larger car to accommodate multiple family members). If you’re looking to borrow a car for an extended period of time, cars leasing is really the way to go.

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Car Lease Deals: What is a Residual?

If you’re considering leasing a car, one of the most important concepts to learn is that of residual value. Typically expressed as a percentage, a residual value measures the depreciation of a vehicle over time.

If you lease a $15,000 car with an estimated 36-month residual of 50 percent, for example, that means that your vehicle will be worth $7,500 when you return it to the dealer in three years – and that your lease will add up to the difference (in this case, also $7,500).

It’s impossible to know how well a particular make or model will fare over time, but residuals reflect the auto industry’s best guess based on previous resale data. When you lease new cars, the residual decreases most rapidly during the first few months, which is why long-term leases are more cost-effective for the consumer.

Generally speaking, people tend to think that European and Japanese cars have higher residual percentages than American cars, meaning they are worth more at the end of car leases. Of course, you should research the projected residuals of the specific makes and models you are considering. A good rule of thumb is to only look for car lease deals with residual values of 50 percent or higher at the two-year mark.

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Leasing a Car? Check Out These Cool Features

The best part about leasing a car is that you get to drive off the lot in a brand new vehicle — smooth brakes, shiny paint job, and of course that new-car smell. Plus, new leases are available with all the latest features, from audio and video entertainment to navigational aids.

Let's take a look at some of our favorite features:

• iPod compatibility. Forget the glove box full of CDs, the tape adapter, and the FM transmitter — in modern vehicles, all you need to hook up your iPod is a single cable.
• Rear seat entertainment. Got kids? Turn long car rides from terrible to tolerable by adding a built-in TV screen in the back seat, capable of playing DVDs and video games, with support for multiple headphones.
• Keyless entry. Whether your office has a scary parking lot or you just like looking cool, keyless entry will make getting into your new lease a breeze.
• GPS navigation. Brooklyn cars drive better when they know where they're going! Navigation systems let you see and hear your driving directions, and some can even be programmed to respond to your voice.

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Build Your Own New York Lease

You can customize pretty much anything these days — from desktop computers to subway sandwiches. So why not cars? At www.WheelsToLease.com, we can't think of a reason why. Our easy-to-use website let's customers design the Brooklyn cars of their dreams, all the way down the the color of the interior. Let's build a car together, shall we?

To begin, we select a vehicle based on make, body type, and price range. A 2010 Cadillac STS sounds pretty nice, doesn't it?


Now it's time to customize our vehicle. Here, we can set the exterior and interior colors — that crystal red tintcoat looks pretty nice, especially when combined with a cashmere nuance leather seating. At the same time, we can choose custom features like all wheel drive and performance breaks, or even order a spare tire!


After selecting our ideal set of options, we see an order summary featuring the MSRP total and links to sign up for a quote or come in for a test drive. How simple is that? With Wheels to Lease, it's easy to find the perfect New York lease for you.

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