When we think of negotiating at the car dealership, the first thing that comes to mind is usually a car loan. There’s a common misconception that car leases are non-negotiable; that the initial price you see is what you get, no exceptions. The good news for drivers who want to lease is there are tactics you can use to get the best price and terms possible.
Here’s how to get a great lease deal.
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Consider How Different Vehicles Hold Their Value
Leasing means paying for whatever amount a vehicle depreciates over the course of your contract. So, it makes sense choosing a vehicle known to hold its resale value will help minimize your expenditures.As U.S. News & World Report points out, doing your research before choosing a model can help you keep more money in your pocket.
Look Up Lease Specials
Speaking of research, spend some time online getting a feel for lease deals available to you before visiting a dealership.Keep in mind though, what you’ll see when you search “lease a car near me” will depend on where you live and other associated factors. For example, dealerships in your area may offer lease specials on certain models because they have excess stock on the lot.
Ask for Quotes on the Sale Price
Instead of walking into the dealership and announcing to every salesperson within earshot you’re planning to lease, ask for their best quotes on the sale prices of whichever models you’re interested in. Only after you compare the sale prices and features should you reveal you’ve decided to lease the car. Then ask said salesman to break down your monthly lease payments using that sale quote they provided.
Asking for the quotes on the sale price allows you to evaluate the price of the car rather than getting bogged down in trying to compare total cost and monthly payments on a lease deal. In particular, consider how much higher than the invoice price each vehicle is selling.
If you mention you’re leasing right away, salespeople may try to tempt you with seemingly low monthly payments — perhaps conveniently leaving out the length of the lease, the money factor (interest rate) and the extra fees you’ll have to pay.
Look at the Capitalized Cost, Not the Monthly Payment
This point is so important it’s worth reiterating: Avoid getting swept up in discussions about monthly payment. What you really want to look at is the capitalized cost, sometimes referred to as the “cap cost.” The dealership may actually be lengthening your payment period to make those monthly payments seem lower — perhaps stretching a three-year lease into three-and-a-half or even four years.
Negotiate the cap cost directly to actually lower the amount you owe. This should lower your monthly payments, but in a more sustainable way.
Mind the Mileage Lease
Before you jump at an almost too-good-to-be-true lease deal, check out the mileage allowance on the car in question. It’s pretty standard to encounter leases with mileage caps of 12,000 miles per year — although sometimes you’ll see even lower figures, like 10,000 miles on luxury models.
The last thing you want to do is agree to a low mileage cap, then exceed it at a cost of 15 to 20 extra cents per mile. It’s more financially prudent to negotiate your mileage cap up front, or keep searching until you find a good deal with the number of miles you need.
Getting a great lease deal is mostly a matter of doing your research and understanding which factors you can negotiate. You may be surprised how much wiggle room there can be on a lease.