5 Times of the Year You Should Never Lease a Car (And 5 Times You Should)

Drivers looking to make smart money moves while upgrading to a new car might want to consider leasing one instead of purchasing it outright.

While leasing a new vehicle can be a great way to experiencing the latest safety features and driving technologies, if you're are not careful, you can end up overpaying on their lease.

As with many things, the key here is timing: leasing a new vehicle at the right time can yield a killer, financially savvy deal, while the wrong time can be a dismal blow to your bank account.

Here are five times consumers should avoid leasing a new vehicle, and another five when they can take advantage of favorable leasing terms and attractive incentives.

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The problem with leasing a car during the summer or early fall months is that many consumers are going on vacations or road trips during this time, which leads to an increase in vehicle sales.

That increase in demand means that prices will likely be higher and dealerships will not offer as many incentives, giving consumers less negotiating power.

Lease payment rates can increase prior to a new model's debut. You should consider keeping tabs on automotive market trends and staying up to date on when manufacturers plan to release new vehicle models.

Even though new car models get released year-round, many manufacturers choose to debut new models in either March or September.

There will be a lot of hype surrounding these new models that can lead to higher demand and price increases, which can decrease consumer bargaining power at dealerships.

Dealerships typically have the upper hand whenever a vehicle is in high demand. Car shoppers hoping to haggle their way to a price that's lower than the vehicle's MSRP should consider waiting 3 to 4 months if they wish to score a better deal.

That timeframe usually allows the supply chain to catch up with the market demand for hot models, giving consumers more negotiating power.

Similarly to when there is high demand, if consumers are looking for a model that is hard to come by due to low inventory, they will face an uphill battle when it comes to negotiating a better lease price.

There will also not be any incentives for them to take advantage of to score a better deal.

Shoppers looking to score a killer deal on a vehicle lease should keep an eye out for holiday sales events.

During long holiday weekends, like the 4th of July, Labor Day, Memorial Day, and Presidents' Day, dealerships will offer discounts and special deals, making these holidays prime occasions for consumers to snag excellent deals.

Towards the end of the calendar year, dealerships are looking to get rid of as much of their current inventory as possible so that they can open up space for next year's models.

This will often lead to a spike in incentives and favorable lease deals as dealerships try to lure in shoppers as they strive to meet their annual sales goals.

Consumers who miss out on hot December deals also have a chance to find an attractive lease offer in January. The first month of the year is usually slow for vehicle sales, and dealerships will offer worthwhile deals and incentives to help business pick up.

Dealerships are usually chasing monthly sales goals during the final week of the month, incentivizing them to close more deals with consumers.

This extra urgency from salespeople can translate into more bargaining power for consumers, increasing the likelihood that shoppers will score a more favorable lease offer.

Savvy consumers who keep an eye out for special promotions that manufacturer offers can score some nice money-saving surprises. Dealerships and manufacturers will unveil attractive lease offers and special promotions throughout the year.

You can do right by their bank accounts by keeping tabs on what local dealerships and manufacturers are offering throughout the year.

In addition to keeping tabs on the pulse of the automotive market, financially savvy shoppers should compare lease offers from different dealerships so they can score the best deal possible, just like drivers compare auto insurance rates to save money on car insurance.

One crucial aspect to consider while comparing lease offers is the annual mileage limit of each contract. Many vehicle leases will have annual mileage limits of 10,000 to 15,000 miles.

If you exceed those limits, you can be charged up to $0.30 per extra mile they drive. That could cost hundreds to even thousands of dollars. That's why it's crucial to carefully negotiate a mileage limit that meets your driving needs before signing a leasing contract.