A Toyota Corolla Lease: Everything You Need To Know
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With the release of the new 2022 Toyota Corolla, this humble compact sedan is now in its 12th generation. When you see a car model with such enduring longevity, you know it’s doing something right.
A huge part of Corolla’s success is its solid reliability and affordable sticker price. Due to its lower price point, most people would buy a Corolla instead of leasing it. However, that doesn’t mean a Toyota Corolla lease doesn’t make sense for you.
Many of our readers are asking about Toyota Corolla leases, and we’re more than happy to oblige. Today, we have a guide about the things you need to know about getting a Toyota Corolla lease. We suggest that you keep reading before beelining to your local Toyota dealer.
What’s a Toyota Corolla Lease and How Does It Work?
Understanding car leases and how they work is critical to ensuring a positive experience. A lease is a way to “borrow” a car from the dealer instead of buying it like with traditional auto loans. Generally, car leases come with a two to four years contract, and your monthly payments are calculated differently than a standard car loan.
Instead of paying for the purchase price of the Corolla, a lessee (the person borrowing the car) makes monthly payments that cover the vehicle’s depreciation cost. The dealership will evaluate the value of the new car versus its residual value (the car’s value once the lease expires) - the difference is the depreciation cost and will be divided into monthly payments plus taxes and interest.
For instance, if you lease a car with a $20,000 price tag and the dealer estimates its residual value to be $8,000 in three years, your monthly payments will be $333 that will cover the depreciation cost.
Like with any other type of loan, the better your credit score, the lower your interest rates, and monthly payments. After the lease, you may have to pay for extra fees like mileage overage and excessive wear and tear.
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Leasing vs. Buying a Toyota Corolla
A Toyota Corolla lease isn’t for everyone, but it has its advantages that may fit your lifestyle and financial situation. Below are the pros and cons of leasing a Corolla versus buying it.
Pros of Leasing a Corolla
- Low monthly payments - Compared to a standard car loan, the average monthly lease payment is almost 23% lower. As mentioned, this is mainly because you’re putting down money to cover the Corolla’s depreciation while it’s in your care. Think of your payments as a monthly rent of the vehicle.
- Drive the latest and greatest car models - If you want to drive the most updated Corolla models packed with tons of new features, leasing is the way to go. Whether it’s an XSE Apex Edition or an SE Nightshade, you can drive the most upscale Corollas at comparatively low rates.
- No surprise repair and maintenance bills - Because lease terms are relatively short, the leased Corolla will still be under manufacturer warranty. This means that all repairs and maintenance will be covered by the owner.
- No hassle with reselling - When the lease expires, one of your options is to walk away and never have to worry about monthly payments anymore. Plus, you don’t have to stress about reselling the vehicle.
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Cons of Leasing a Corolla
- Mileage restrictions - If you’re a frequent driver, leasing may not be for you. Dealerships put mileage restrictions on leased vehicles to preserve their value and minimize wear and tear. Typically, mileage limits range from 10,000 to 15,000 miles per year. Violation of the mileage restriction means hefty fees that can be as much as 58 cents per mile.
- Wear and tear - Leasing comes with its own unique set of responsibilities, including wear and tear charges. Fortunately, most leases have reasonable wear and tear guidelines, and everything should be spelled out on the contract. We highly recommend reading Toyota’s excessive wear and tear guidelines to learn more.
- No ownership - Undoubtedly, the biggest disadvantage of leasing is that your payments aren’t going towards building equity for a new car. If you’ve always wanted to own a brand-new Toyota Corolla, leasing is out of the question. However, some contracts may allow you to purchase the car once the lease expires.
Quick Questions to Ask Before You Lease a Corolla
If you want the best lease experience, you must know what you’re getting into. Here are some questions you need to ask yourself before getting a Toyota Corolla lease:
Do you want a brand new or used car?
Monthly payments for driving a new car will likely be less if you lease. Moreover, there’s a well-kept secret among dealerships that it’s possible to lease a used car. In general, salespeople prefer to sell a used car instead of leasing it due to reduced profit margins.
But if you manage to lease a used car, you can enjoy significant savings on your monthly payments - provided that you’re flexible with your choice of vehicle.
How much driving do you plan on doing?
Whether it’s for work or recreation like road trips, leasing isn’t recommended for those who drive a lot. As mentioned, car leases have strict mileage caps ranging from 10,000 to 15,000 miles per year. This is why you should carefully estimate how many miles you put in the odometer annually.
Some dealerships offer high mileage leases that enable you to drive more than the standard mileage restriction. If you’re not going to satisfy the initial cap, a high mileage lease might be worth considering just so you can avoid paying for expensive overage charges.
THE BEST USED LUXURY CARS ON THE MARKET
Buying a used or CPO luxury car is one of the smartest buys you can make - you can get a lot of car for not much money. You can pick up a three-year-old luxury car for about half of what you’d pay new. Check out this list of the best used luxury cars on the market to find the best deals.
Can you keep up with the car’s maintenance?
Prepare to pay extra when it’s time to return the car to the dealer if you damage your Corolla beyond standard wear and tear. Your Toyota dealer should provide you with a guide about what constitutes normal wear and tear. They may let you slide with small scratches and dents and won’t penalize you.
If you think you can’t maintain the interior and exterior of your Corolla, avoid getting a lease.
Get a Curated List of the Best Used Cars Near You
The CoPilot car shopping app is the easiest way to buy a car. Tell us what you’re looking for and we’ll search the inventories of every dealership in your area to make you a personalized list of the best car listings in your area.
Only looking for newer models? CoPilot Compare is the search engine for nearly-new cars. Only see cars five years or newer with low mileage — CoPilot Compare is the best way to find off-lease, early trade-in, and CPO cars.
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