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How to Negotiate a Good Deal on a Car Lease

The following guide explains how to negotiate an attractive deal on the vehicle that you want to lease.

Step 1: Determine if you are a good candidate for leasing.

Leasing isn't for everyone. If like to get a new vehicle every couple of years and keep your driving to around 15,000 miles per year or less, then leasing may be for you. On the other hand, if you generally keep your vehicles for a long time or put a ton of miles on them, you may be better off financing or paying cash for your new vehicle.

Step 2: Decide what vehicle you want.

Next you need to decide what vehicle you want to lease. Do some research on-line on sites like Edmunds.com and develop a list of possible candidate for your new vehicle. Then go to a few dealers and see the vehicles in person. While reading reviews about vehicles is great, it's no substitute for seeing a car or truck in person and driving it. Make sure not to finalize a deal with any dealer before researching how much the vehicle you want should cost.

Step 3: Decide how long a lease you want.

Once you know what vehicle you want, you have to decide how long you want to lease it for. Generally speaking, the longer one leases a vehicle for, the lower its monthly payment will be. There are exceptions to this rule, but this is usually how leasing works because with longer leases one is able to spread the large initial depreciation hit that vehicles' experience out over a larger number of payments. The "sweet spot" for most new vehicle leases is usually 24 to 39 months. These are the terms that manufacturers usually provide lease support on. One really shouldn't lease for any longer than 48 months or so. Four years is a long time to be committed to a single vehicle. Over the course of four years, your life could change, causing you to need a larger vehicle, or put many more miles on your vehicle than your lease allows.

Step 4: Determine what mileage allowance you need.

Now you need to decide how many miles per year you will need to drive your leased vehicle. The higher your leased vehicle's mileage allowance is, the higher its monthly payment will be. Most people drive from 12,000 to 15,000 miles per year. The majority of banks that lease new vehicles offer 10,000, 12,000, and 15,000 mile per year leases. Some banks offer more options and some offer fewer. If you need to drive more than 15,000 miles per year, you will probably have to purchase additional miles on a per-mile basis. It is usually less expensive to do so at lease signing than it is to wait until lease-end and have to pay an excess mileage penalty.

Step 5: Negotiate an attractive selling price.

One of the most important numbers to focus on when leasing is the selling price of the vehicle that you want. Always remember that the selling prices of leased vehicles are negotiable, just as if you were paying cash for or financing them. You should be able to get a good idea of how much you will have to pay for the car or truck you want by looking up its Edmunds.com True Market Value, and by visiting the "Prices Paid: Buying & Leasing Experiences" forum at Edmunds.com to see how much community members there have paid for similar vehicles lately.

Step 6: Find out what your vehicle's money factor should be.

Now that you know how much you want to pay for your new vehicle you need to find out what sort of lease program is available on it. Manufacturers' captive finance companies, banks that are owned by automakers, often have the most attractive lease program for cars and trucks. This is because the manufacturers provide special low lease money factors on vehicles to make their payments attractive so that they can sell more units. It is important to know what the "buy rate" lease money factor is for any vehicle that you want to lease. The "buy rate" is the number that is published by the bank that you want to lease through and it is the lowest possible money factor that is available on it. One should know this number when leasing because dealers often have the authority to "mark-up" vehicles' money factors to add additional hidden, back-end profit to deals. You may be able to find out what the current lease program is like for the car or truck that you want by paying a visit to the aforementioned "Prices Paid and Lease Experiences" forum at Edmunds.com.

Step 7: Finalize your deal.

Now that you know how much you should pay for the vehicle you want and what its money factor should are in good shape because these are the two main profit centers for dealers on leased vehicles. Comparison shop with a few dealers in your area to get an attractive price on the vehicle that you want and have the dealer that you decide to lease from calculate your vehicle's monthly payment using its "buy rate" lease money factor.

Step 8: Enjoy your new ride.

Now that you've negotiated an attractive deal on the car that you want, drive it off the lot and enjoy...just make sure not to pick up any speeding tickets :).

Car_man
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Prices Paid: Buying & Leasing Experiences Forum
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Comments

  • 1. Make a list of 2-3 cars in the same class , that you like and you would enjoy leasing .
    Most people don't know this , but just because 2 cars have the same MSRP , does not make them lease the same .

    FOr instance , the Mercedes ML leases for under 500/month with zero down at this time and the ar has a 52k MSRP ; The same MSRP BMW X5 will lease for over 100 more ...so if you have both cars on the list , then it will be an easy choice

    2. Decide what car leases the best and go for it

    * Auto Brokers are usually a good way to shop for a car , as they can help you compare more that one brand in the same place , and usually a broker will give you a straight answer when it comes to vehicle comparasing

    I hope it helps,
    D.
  • car_dudecar_dude Posts: 14
    edited January 2011
    We always leased our cars through the dealers, but when our current lease was up we decided to also try a leasing company.

    I was cautious going through the process with a broker, as everything is done over the phone, but was totally impressed by the experience.

    As previous poster mentioned, brokers are more direct and give you the price which is better than any dealer "best deals". We started with few dealers and thought we negotiated the best price, but broker came in at lower payment for the same car.

    I also appreciated that with a broker we didn't have to deal with sales agent going back and forth to his finance manager for the price, I am tired at that game.

    Brokers are also great in comparison shopping, if you are not decided on the car you want. They give you lease prices on several similar cars and also alert you on any specials in effect.

    The drawback of going through the broker is that you are not able to see and drive the car, but you can stop at you local dealer showroom and see the car in person.

    And to top our pleasant experience - the car was delivered to our door :) :blush:
  • I guess that the main reason why people chose a broker instead of the dealer is because of the process. It is just a big waste of time dealing with salespople at a dealer and it almost always cost you money .
    There are places like this one http://www.lease-specials.com that show you prices upfront without the need of pulling credit and going to the dealer , and this makes the car buying experience simple and painless

    Daniel
  • Daniel,

    Good observation.

    Our leasing broker has deals listed on their web page, so one can check the deals and have an idea on pricing before talking to the broker.

    There are quite a few of leasing broker in business, I am surprised they are not as popular as brick & mortar car dealerships.
  • I'd love to get some more info on Lease Broker's? Are there any National Agencies that part take in this?
  • Any Auto brokerr will have the same license as a car dealer , so all brokers are regulated in the basic same way by the DMV.
    There are a couple big ones in southern California like Carsdirect or http://www.bestcarpurchase.com/
    that you can use to shop online , plus manny more local nitch auto brokers serving their local communities; It is very typical for the korean community to have a local korean broker , or the armenian community and so on .

    D.
  • Keep in mind that even if you work with a broker, you will be getting the car through a dealership.

    It will be the the dealer who will complete paperwork on your lease and deliver the car to you.
  • This happens without fail every time I'm looking to get a quote on a car.

    I'll get a legitimate quote from a dealer or through Zap.com on Consumer Reports, and take that quote to another dealer.

    And their reply will be: "Thank you for the opportunity but again I can not touch that-if a dealer is willing to take a loss on his vehicle than so be it-good luck I hope it turns out well for you."

    Something about that line seems fishy, as if to give you a phony guilt trip or something.

    Any thoughts on this?
  • daniel12304daniel12304 Posts: 6
    edited March 2011
    One dealer's loss may be a deal for anther dealer , or for an auto broker for that matter. Diffrent dealers get different incentives from the factory based on volume and volume of sales for the previous month .
    So when a dealer tells you that they cannot do the price , they probably don't want to do that price because of a small proffit (keep in mind that the salesman gets a percentage of the proffit , so he may not be interested in selling a car for a mini deal of 50$ or 100$) , or simply that dealer did not meet the quota last month and they don't have all the incentives from the factory .

    That's about it for today ,
    Only advice : Use an Auto Broker when buying a new car , or be prepared to do the research and shop at least 5 dealers , to make sure that you get a good price . Also just because a website told you a price , does not meen that is a good price for thatmonth . I have seen sites like truecar that give a average price , and we could beat that price by more then 5.000 :) so it is all relative because incentives change on a monthly basis for most cars .

    image
  • Any brokers people can recommend in NYC?
  • tntgirl12tntgirl12 Posts: 4
    Hello,

    I currently have a lexus with approx. 3,000 in negative equity. I would like to trade in my car and possibly lease to keep my payments lower then financing a new vehicle. Would this would be a good idea? I would be interested in a mercedes c class or audi a4/a5. What would be the best plan of action for this situtaion , so I know what I am getting into when I go to the dealer.
  • fushigifushigi Posts: 1,235
    I'm sure this isn't what you want to read but the best plan of action is to keep the Lexus and keep paying on it until at least the time at which you're no longer upside down.

    When you roll negative equity into the next vehicle it means you're even further upside down on it's loan. It'll take longer still to hit the break even point and actually gain some equity. You will likely also wind up paying more in interest changes and may not qualify for the best loan rates and/or be forced to carry (and pay for) gap insurance.

    Financially, it just doesn't make sense.

    Of course, finances aren't everything. If the Lexus no longer fits your life - no longer holds the entire family, lost job & can't afford payments, etc. - then trading it in may be the appropriate thing to do.

    Personally, I buy cars that I believe I'll be comfortable with for 8 or more years. By doing so I enjoy several years with no payments and have positive equity to use when the time comes to buy my next car. My last car I bought in Feb '99 with 15% down, financed the rest for 2 years so it was paid off in early '01, and kept it until Dec '09. I enjoyed eight and a half years without payments and was never in a negative equity position.
  • tntgirl12tntgirl12 Posts: 4
    I am considering this option and will try and pay more off on the car in the mean time. That is what I was afraid of not being able to negotiate to get a fair deal because of the negative equity. Thank you for the advice.
  • tntgirl12tntgirl12 Posts: 4
    Thank you for the advice. I think I will look into using a car broker to help with the lease. I am in the NYC area. Are they any specific places I can try and sell my car to or get appraisals from besides the dealership I would be leasing the car from? I have considered private sale. I want to put as little money down as possible so Im just researching to be better prepared. When would be the best times of year or moth to lease a car?
  • cfopvcfopv Posts: 6
    I am in a Mercedes E350 lease that terminates in March of 2013. Yesterday, I checked the payoff of the lease and noticed it was less than the trade-in value as shown here on Edmunds. Would a dealer be interested in paying off the lease to obtain my vehicle as a used vehicle in order to sign me to a new lease?
  • I am getting started looking for good leasing deals for a 2011 BMW 328xi 4dr with premium package and navigation. I also want a convenience package but I haven't heard from any dealers with all three on a vehicle.

    I want to lock the deal by end of year but I don't want to visit a lot of dealers, as I have a small child and a long commute to work -- time is short/precious. What's the best way to make sure a dealer is serious before I make a trip out to them? Any tips? I've already driven the car, and I really like the ride, interior and features. Also I've seen prices on here and looked up the invoice and it should be well within my price range. So far the dealers only want to talk MSRP terms on the phone and even the one dealer I have visited in person.
  • daniel12304daniel12304 Posts: 6
    edited April 30
    First of all the BMW 3 series will change the body style in a few months , so the deals are very good at this time. The best way to shop for a car without leaving your home is an Auto broker - depending on where you live , someone can do the shopping and negociating for you - its like hiring a lawyer when going to court - the broker will deliver the car to your home in motst cases and handle the entire transaction
    Just google Auto broker in your area and see what you can find

    Good luck
    Daniel
  • I know a broker that gets great prices on mercedes leases 340 for a c clas mercedes 2012 with 1500 drive off at signing a poaded car with amg package, great broker
  • steverstever Ex Yooper, en route to New MexicoPosts: 40,499
    A reporter is looking to speak with consumers who are in the market right now for a car loan or a car lease or who just recently secured a loan or lease. Is/was it easier or more difficult than you expected? Please send a quick note discussing your experience and your preferred contact information to pr@edmunds.com by Friday, January 6, 2012.

    Moderator
    Need help navigating? stever@edmunds.com - or send a private message by clicking on my name.

  • johngettlerjohngettler Posts: 12
    Hello all,

    1. Unfortunately, there isn't a law requiring auto makers to publicly disclose their lease money factor rates (interest rate) or their residual rates 9calue of car after duration and miles are put on.) This makes it *very* difficult to compare lease incentives across different comparable makes, models and trims. I wish there were a law enacted that would force this information to be as clear as auto loan interest rates are today.

    2. Somehow, Car_man who is a "host" on these excellent Edmunds Forums, seems to thankfully have access to nearly unlimited lease money factor and residual info from most makers, and for years has been reporting very accurate information in reply to each individual request. But he is only one man, and it can take some days for him to get back to each person. I have always been super curious, Car_man, where *do* you get this information, and how come we all can't just get to the data directly? I know of course, it's not up to you, but can you give us some insight on how you gather this info? And why edmunds.com can't or won't just publish this extremely valuable data in an open manner? Of course, thank you for all the information that you *do* pour out every day Car_man.

    3. The best always accessible website that I have found that has a good amount of detailed lease info for many cars, is this link below (sorry Edmunds, it's from cars.com). It is *not* always accurate, and should be taken with a grain of salt, but I have found it to be helpful, but not nearly as accurate as Car_man. Note that this site lists money factors as a percentages, which is actually the money factor number times 2400 (for example MF 0.0006 x 2400 = 1.44%) to get a fairly comparable number to standard auto loan interest rates. Just enter you zip, and then click into each model and trim to see detail lease info.

    http://www.cars.com/go/advice/incentives/index.jsp

    4. Each dealer *should* be able to provide you MF and Residual for a specific car, with a specific lease length in months, and miles per year. But you have to "get involved" with a sales guy to begin to extract this kind of info. Ugh.

    5. There is a company called ALG that publishes a "residual guide" each quarter of what they recommend as the residual for each model and trim, after different lease lengths of time, and different mileage usage. They *will sell* you a single copy of their "Residual Percentage Guide 2012 Models National" book for about $50 by calling the number on this link, 1-805-898-8400. The manufacturers *do not* always match these residuals all the time, but it *is* a fair way to generally see what models and trims would give you a relatively cheaper monthly payment, due to holding their value better.

    https://www.alg.com/products/guidebooks.html

    Hope this helps everyone.
    John Gettler
  • fanfortoyotafanfortoyota Posts: 1
    edited November 2012
    I'm looking to do a 36 month lease on a 2013 Mini Hatchback but not sure if I'm entering a good deal. I've read some of the posts and replies on here about the residual, etc. I'm somewhat confused so came here for help. Any help is appreciated! Here is what I'm looking for and what they're offering:

    Option 1 - Custom built online Hatchback, panoramic sunroof, Red, Premium Package 2, Heated Seats, Arm rest, Automatic, Heated Seats, 16" black 6 star wheels, Rooster red trim on dashboard, upgraded stereo. $25,296; Residual .65; 10,000 miles; $950 down with a $343 monthly payment

    Option 2 - Same as above but with $2000 down and a $302 monthly payment

    Option 3 - Premium Package 2, automatic, center armrest, (NO updated stereo, heated seats, or 16"wheels) - $$23,500; Residual .65; 10,000 miles, $908 down with a $322 month payment

    Option 4 - Same as Option 3 but with $2000 down and a $289 monthly payment

    Option 5 - Purchase a used 2010 Black Mini Cooper S, panoramic roof, 23K miles, NO heated seats, NO upgraded stereo, $19,500

    Thanks in advance!
  • In July, I'll be returning my leased 2010 Altima. I'm starting researching early to see what my next car will be. In doing this research and finding these forums, I'm realizing how much I didn't know about the process of making a lease deal. When the dealer gave me the price on my current lease, I accepted right away because the payment was significantly less than what I was paying for the purchase I traded in to go on lease. I assumed that when I saw those lease deals offered on TV and in newspaper, everyone paid the same for the lease. I'm now finding out I was quite wrong and should have negotiated for the price.

    What I'm hoping to get here is some guidance on how to begin the conversation with a salesperson regarding negotiating the price of the care the lease is based on. Can anyone offer suggestions? I would be most appreciative.
  • My first recommendation is to only deal with the internet sales people and only deal with them by email. First get the absolute best deal relative to invoice on any car on the lot (truecar is good for helping with this) then find out the buy rates for money factors and residuals. Also find out which dealer fees are mandatory and which are optional. Do not muddle the transaction by trading in a vehicle or purchasing any additional anything other than the vehicle itself.

    Once you have the following information:
    MSRP
    Selling Price after dealer discount and all incentives
    Buy Money Factor
    Residual
    Miles / Yr
    All applicable fees (lease acquisition fee, registration fee, etc)
    **NEVER PUT MONEY DOWN ON A LEASE** (Also known as capital cost reduction)

    Use a lease calculator to calculate the lease yourself and send the results along with the lowest quote you got by email to multiple dealers. Get the dealer to send back written verification of the entire deal. Only agree to visit the dealer in person once every last detail of the deal is ironed out.

    Always remember that you have the power when you are dealing by email / phone. Once you are at the dealer they are the masters of wearing you out by taking hours and hours to agree to each concession and making you feel guilty.

    Yes - this process is arduous, but if you are not so picky about the make and model and are willing to go for the best available lease deal and follow the steps above, you will save about 10% off MSRP compared to the typical dealer. You can lease $40,000 vehicles for under $300/mo and sometimes for only 24 months so that you get a new car faster.
  • Thanks for the good info. Of course my eyes darted to the line about getting a $40,000 car for under $300/month. Which cars might those be? Other that going through forums on this website, is there another place I can see a multitude of current lease offers in one place? At this point, I still want something foreign, but are more interested in price than anything.

    I'm definitely doing more work online/via e-mail this time. My current dealer has had me in so many times and offered bad deals, that is part of the reason I'm thinking about going to a completely different manufacturer altogether.
  • steverstever Ex Yooper, en route to New MexicoPosts: 40,499
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  • You can get an Infiniti G37. My local dealer advertises it for $259/mo. Some people got E class mercedes last month for $350/mo ($60k/car). Look through the forums and look at deals others are getting and look at advertised deals.
  • kyfdxkyfdx Posts: 28,572
    Once you amortize the upfront money, the G37 lease is more like $400/mo..

    Not a bad deal for a $40K car, but it isn't $269....

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • paperboycccpaperboyccc Posts: 67
    edited February 2013
    http://infinitimv.mobi/infiniti-lease-2013-g37-journey-sedan--dealer-9994-sid-25- - - - - 505.html?isoffer=true

    They advertise it for $249/mo with $999 cap cost reduction and $700 acquisition fee. Amortizing those would add $71/mo for $320/mo. Infiniti should allow 9 multiple refundable security deposits to bring the interest rate down. You should also be able to negotiate a better deal than advertised.
  • kyfdxkyfdx Posts: 28,572
    Yeah... that's a good deal... we don't have RWD G37s around here..

    The MSD program is great.... I did that on my wife's G37XS... saved around $60/mo.... :)

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • Same here. Did the full 9 MSDs on my G37 and saved a lot. The deals back then weren't as good as they are now. My lease expires in six months but I'll looking for something bigger with a growing family.
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