General
-
Mo Naderi
Can you lease a new car for under $400 a month in California? Yes. Most months that budget covers compact sedans and small SUVs, and it often reaches compact SUVs and midsize sedans, hybrids included. Pickups, electric cars and entry luxury models come under it some months, usually with more money due at signing.
How far the budget goes depends on nine things: the price of the car, how well it holds its value, what you pay at signing, the term, the miles you drive, sales tax, loyalty and conquest credits, your credit tier, and the month you sign. Each is explained below, along with the kinds of cars that have the most room and what an offer has to show before you can compare it with another.
Where this month's payments are
There are no payments on this page. This month's cars are on our deals page, listed without prices. To get the numbers for one of them, or for any other new car, send us a request or call or text (805) 888-8021. After a short consultation about how you drive and what you want to spend, you get one written quote, made out to you, with every term on it.
We are a licensed California autobroker (#82402). We work with more than 400 dealerships, have delivered more than 1,200 cars, and deliver to your door in Southern California.
What decides whether a lease lands under $400 a month
A lease payment covers the value the car loses while you have it, plus a rent charge, tax and fees. Our guide to how a car lease works goes through that step by step. Nine things move the payment up or down.
What moves the payment | The payment is lower when | Who decides it |
|---|---|---|
Price of the car | The car costs less, or the dealer agrees to a bigger discount | You and the dealer |
How well it holds its value | The lender expects the car to be worth more at the end | The lender |
Money down at signing | You put more down, though the lease costs about the same | You |
Term | The carmaker is backing that length this month | You choose, the lender prices each length |
Miles a year | You take a lower allowance | You |
Sales tax | The car is registered where the rate is lower | Your address |
Loyalty and conquest credits | You qualify for one | The carmaker |
Credit tier | Your credit puts you in the lender's top tier | The lender |
Month and model year | The carmaker is backing that car this month | The carmaker |
The price of the car
Most of a lease payment pays for depreciation: the gap between the price you agree on and what the car is expected to be worth at the end. A car that costs less has less value to lose, so the least expensive classes have the most room in this budget. The price is negotiable on a lease, the same as on a purchase.
How well the car holds its value
The lender sets a residual value, its estimate of what the car will be worth when the lease ends. Your payments cover the difference between the price and that figure. That is why two cars with the same sticker price can have very different payments, and why a car that holds its value can lease for less than a cheaper one that does not.
What you pay at signing
Money you put down at signing lowers the monthly payment, but it barely changes what the lease costs in total. This is what makes advertised payments hard to compare, so it has its own section below.
The term
Each term has its own residual and its own rate, and carmakers often back one term more than the others in a given month. A longer lease is not automatically a lower payment. Ask for the same car at two or three terms and compare. Our guide to choosing a lease term explains what changes with the length.
The miles you drive
A lower mileage allowance means a lower payment, because the car will be worth more at the end. Advertised payments are often built on a low allowance. If you drive more than the ad assumes, your payment on the same car is higher, or you pay a charge for each extra mile when you return it. Our guide to lease mileage shows how to estimate the miles you really drive.
California sales tax
California charges sales tax on each lease payment, at the rate for the address where the car is registered. The statewide rate is 7.25%, and district taxes add to it in most places. In Los Angeles County the rate is 10.25% or more, depending on the city (October 2026).
Advertised payments are usually shown before tax, so a payment advertised just under your limit is over it once tax is added. More in California sales tax on a car lease.
Loyalty and conquest credits
Carmakers give a credit to people who already drive the brand (loyalty) or who are switching from a competing one (conquest). The rules change month to month, and you need proof in your name, such as a registration.
An advertised payment may already have one of these credits taken off. If you don't qualify for it, your payment on the same car is higher. Our guide to loyalty and conquest offers explains who qualifies.
Your credit tier
Lenders sort applicants into tiers and give the lowest rent charge, the lease's version of interest, to the top tier. Advertised payments assume that tier. In a lower one, the same car costs more a month. The money factor guide shows how the rent charge is worked out.
The month and the model year
Carmakers set lease programs for a limited period, usually a month, then replace them. A car that fits the budget this month may not fit next month, and the reverse. Programs are also set by model year, so when the new model year arrives the outgoing one often gets more support. Dealers work to monthly sales targets, which can make the end of a month a better time to agree on a price.
A low payment with a lot due at signing is not a cheaper lease
Money paid at signing is part of what the lease costs. It lowers the monthly payment because part of the lease has been paid in advance. Two offers on the same car can show very different payments and cost the same in total.
To compare offers, work out the real monthly cost of each one:
Take the total due at signing.
Add all the monthly payments. If the first payment is already inside the amount due at signing, count one payment fewer.
Divide by the number of months.
The offer with the lower result is the cheaper lease, whatever the advertised payments say. Count tax in both offers or leave it out of both.
There is another reason to keep the amount at signing low. If the car is stolen or totaled early in the lease, the money you paid at signing does not come back to you, with or without gap coverage. Our guide to due at signing covers what that amount includes and what "zero down" really means.
"Under $400 a month" can mean three different things
The same car can be under the budget or over it, depending on what you count.
The advertised payment. Before tax, with money due at signing that the payment leaves out.
The payment with tax. What leaves your account each month.
The real monthly cost. Everything you pay over the lease, the amount at signing and tax included, divided by the months.
Many more cars pass the first test than the third. Decide which one your budget means before you look at offers, and say so when you ask for a quote.
Which kinds of cars fit under $400 a month
The budget goes furthest on cars that cost the least and hold their value best. The table shows where the main classes usually stand in California, on the advertised payment and with everything counted.
Kind of car | On the advertised payment | With the amount at signing and tax counted |
|---|---|---|
Compact sedans | Under the budget most months | Usually still under |
Small SUVs | Under the budget most months | The less expensive ones stay under |
Compact SUVs, midsize sedans and hybrids | Under the budget most months | Some stay under, more go over |
Midsize pickups and electric cars | Under when the carmaker backs them that month | Close to the limit, on either side |
Entry luxury sedans and SUVs | Under some months, with more due at signing | Almost always over |
Larger SUVs, minivans and full-size trucks | Under now and then, with a large amount due at signing | Over |
This changes every month. A strong program can pull a compact SUV or a pickup well inside the budget, and a weak one can push a small SUV out.
What the class names mean
Carmakers describe their own cars this way:
Compact sedans: the Nissan Sentra, the Volkswagen Jetta and the Kia K4. Hyundai calls the Elantra a compact car.
Small SUVs: Nissan calls the Kicks a subcompact SUV, and Hyundai calls the Kona a small SUV.
Compact SUVs: the Hyundai Tucson and the Honda CR-V.
Midsize sedans: the Honda Accord and the Hyundai Sonata.
These names show what each class is. They are not a list of cars that fit this budget. Trim, options and the month's program decide that car by car.
What an offer has to show before you can compare it
A payment on its own tells you very little. Before you compare two offers, each one should show these lines. If one is missing, ask for it in writing.
The exact car: model year, model, trim and sticker price (MSRP)
The selling price the lease is built on, the residual value and the money factor
The monthly payment, and whether tax is in it
The total due at signing and what it is made of: first payment, any down payment, fees, registration and tax
The term in months
The miles allowed per year and the charge for each mile over
Whether a security deposit is required
The credit tier the payment assumes
Any loyalty, conquest or other credit already taken off, and what it takes to qualify
The total of all payments over the lease
The price to buy the car at the end, and any fee for returning it
The date the offer ends, and whether it applies in California
Federal and California rules already require much of this in advertising. A lease ad that states a payment must also state the total due at signing, the number of payments, whether a security deposit is required, and the mileage limit with the charge per mile over it. If tax and license are extra, it must say so. When the fine print under a payment leaves these out, the payment cannot be compared yet.
To put two offers side by side:
Make sure both are for the same car and trim.
Put both on the same term and the same miles.
Work out the real monthly cost of each.
Check which credits each one assumes and whether you qualify.
Add tax to both, or leave it out of both.
Our lease calculator shows how the payment moves when you change the amount at signing, the term or the miles. Our guide to reading a lease quote goes through one line by line.
What to have ready when you ask for a quote
Five details let whoever quotes you build it to your budget the first time:
Which of the three readings of the budget you mean
The miles you drive in a year
The ZIP code where the car will be registered, for the tax rate
What you drive now and whose name it is in, for loyalty and conquest credits
When you need the car
Questions people ask
What cars can I lease for $400 a month?
Compact sedans and the less expensive small SUVs most months, with the amount at signing and tax counted. Compact SUVs, midsize sedans and hybrids fit on the advertised payment, and some of them still fit with everything counted. A pickup, an electric car or an entry luxury model fits in months when the carmaker backs it, usually with more due at signing.
Can I lease a car for under $400 a month with no money down?
In the smaller classes, often yes. With nothing put down, the costs normally paid at signing are spread into the payment, so it is higher than the advertised one and fewer cars stay inside the budget. "Zero down" also does not mean nothing is due at signing. It normally means no down payment, with the first payment, fees and registration still due.
Can I lease an SUV for under $400 a month?
A small SUV, most months. A compact SUV fits on the advertised payment more often than on the real monthly cost. All-wheel drive, a hybrid system and a higher trim each add to the price, so the version you pick matters as much as the model.
Can I lease a luxury car for under $400 a month?
On the advertised payment, some months. It takes an entry model and usually a larger amount due at signing, a low mileage allowance and a loyalty or conquest credit. Work out the real monthly cost before you set it against a mainstream car at the same payment.
What is the cheapest car to lease in California right now?
It changes every month. It is usually a compact sedan or a small SUV that its maker is backing that month. The car with the smallest advertised payment is not always the one with the smallest real monthly cost, so ask for the amount due at signing next to the payment.
Does a lease payment under $400 include tax?
Usually not. Advertised payments are shown before tax, and California adds sales tax to every payment at the rate for the address where the car is registered. If your limit includes tax, say so when you ask for a quote.
What credit do I need for the lease payments I see advertised?
Advertised payments assume the lender's top credit tier, and each lender draws its tiers differently. Below the top tier the same car costs more a month. If your credit history is short, a co-signer can make the difference.
What if my budget is lower than $400 a month?
The same nine things apply, with less room. Stay with the least expensive classes, choose the miles you really drive, and compare on the real monthly cost, because the smallest advertised payments often come with larger amounts due at signing.
When is the best month to lease?
The month the car you want has a program behind it. Programs change monthly and with the model year, and dealers tend to be more flexible on price near the end of a month. If your current lease is ending, start before its last month so you can see more than one month's programs.
Is leasing or financing cheaper on a $400 budget?
The same payment covers more car on a lease than on a loan. A lease payment covers the value the car loses during the term, plus the rent charge and tax, while a loan payment pays for the whole car. Leasing suits you if you change cars every few years and stay inside the mileage allowance. Buying suits you if you keep a car long after it is paid off.
Can I choose the brand?
Yes. If you already have a make in mind, our pages on Toyota, Honda, Hyundai, Kia, Nissan, Mazda, Subaru, Volkswagen and Chevrolet leases explain how each one works in Los Angeles. To stay inside a tight budget, start with the brand's smallest models and base trims.
All new cars arranged for sale are subject to price and availability from the selling franchised new car dealer.
