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How to Negotiate a Good Deal on a Car Lease

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Comments

  • 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.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,927
    If you have had a wonderful experience using Edmunds.com's True Market Value, and you recommend Edmunds.com to your family and/or friends, our media relations manager would like to talk to you. Please send your daytime contact info to pr@edmunds.com.

    or

    If you have had a wonderful experience using Edmunds.com's Used Car Inventory, and you recommend Edmunds.com to your family and/or friends, our media relations manager would like to talk to you. Please send your daytime contact info to pr@edmunds.com.
  • 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.
  • 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.
  • 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.
  • I'm in the research stages of deciding what my next lease will be. My current lease is scheduled for return in July. I recently graduated with my Master's Degree and what to take advantage of one of the College Grad programs that car manufacturers offer. I've looked and some of the dealer/manufacturer website, and most are pretty vague about what their programs offer. Has anyone leased a car through one of these programs? Which ones are worth looking into?
  • un1263un1263 Posts: 4
    The G lease will be zero down by summer. It usually happens in July or August but with the new Q coming out late summer, I wouldn't be surprised if they go zero down on the G in May or June.

    Late last summer Infiniti did a zero down 18 mo lease and sold a ton of cars.
  • billy3554billy3554 Posts: 147
    Truecar does not provide the lowest price possible for a vehicle. Truecar is a good place to start but the price a person pays should be lower. At a minimum, a buyer should reduce the Truecar price by about $300, to account for the money dealers pay Truecar for each sale.

    Truecar prices are essentially set by the dealer. While they may appear low they do not reflect any negotiation which usually results in a better deal.

    Carwoo is a better choice as it allows buyers to negotiate with dealers without disclosing personal information.

    While much of the preliminary negotiation can be handled over the internet or phone, the best deal will almost always be attained via a face-to-face negotiation with the dealer.

    The car buying process is indeed arduous. But it is equally difficult for the sales person who does not get paid if the buyer does not buy. In that regard the buyer has the upper hand.

    The buyer can always walk to another dealer. However, the sales person knows if a person walks they will not likely return. If the sales person believes a buyer is ready to leave most sales people will immediately provide a better price. Feet are a buyers best negotiation tool.

    There are no dealer fees which are mandatory. Dealer fees, by definition, are set by the dealer and are part of any negotiation. The only mandatory fees are those set by law or regulation.

    It really accomplishes nothing to attempt to hide things from the sales person such as a trade in vehicle. Sales people sell for a living and they deal with every imaginable type of buyer.

    To get a good deal identify the invoice price of the vehicle, any incentives available to both to the buyer and the dealer, dealer holdback, and use Edmund's forums for prices paid information. A good method to arrive at a price goal is to take the invoice less incentives less holdback and add a few hundred for dealer profit.

    Research the trade value using Edmunds, KBB, and NADA. Taking an average of these three is a good approach.

    Research the credit profile. Credit Karma is a good site to obtain a free estimate of a credit score.

    With the right information a person can always get a very good deal.
  • billy3554billy3554 Posts: 147
    Almost all advertised lease deals for an unusually low monthly payment requires a considerable CAP reduction. You cannot lease a $60K vehicle for $350 a month with such a reduction.
  • karhill1karhill1 Posts: 98
    That is true. It is simple math. If one leases a $60K vehicle and the residual value is 60 percent the amount which needs to be paid during the lease is $24,000. If a person negotiates the price to $56K, the amount is $20,000. Over a 36 month lease the monthly payment for this $20K is $555. The actual payment would of course be higher due to the money factor.

    Low advertised lease prices are designed to entice people to consider the lease. Anyone who believes they can lease a $60K vehicle for only $350 has not read the small print.
  • paperboycccpaperboyccc Posts: 67
    edited March 2013
    Yes, it's simple math. Mercedes was offering vehicles with around 74% residual and 13% off. On a $60K vehicle the amount to be paid in 24mos would be $7,800 or $325/mo plus the money factor. It's not common, but read the E-class thread for examples.

    Mercedes never advertised this deal - but several buyers were savvy enough to recognize it and negotiate it.
  • synovial1synovial1 Posts: 2
    I negotiated a lease for my fiancée on a new chevy traverse however, when she went in to do the paperwork they totally changed the deal from 544 a month including tax to 679 by telling her that the deal inalready made disnt include tax etc.. but it did, they where just being dishonest! Also, they sold her unnecessary tire ins and appetance package etc... That she felt she was forced into. I was originally going to use my 1k off lease incentive because I lease a BMW but, she decided to use usaa pricing instead and the deal has been done for over a week and the dealer called and said he wants to bring him a check for 1k or, a copy of one of my lease statements. I am not giving those crooks anything after they where so dishonest not to mention I am not on the deal at all! Now we are getting calls from gmac about her previous car asking why it's not paid off yet? This can't be legal or ethical and, I am so upset that all this is happening. I don't want to give them anything after they treated her this way. What should I do?
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