How to Negotiate a Good Deal on a Car Lease

CarMan@EdmundsCarMan@Edmunds Member Posts: 38,514
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 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 True Market Value, and by visiting the "Prices Paid: Buying & Leasing Experiences" forum at 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

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 :).

Prices Paid: Buying & Leasing Experiences Forum


  • steverstever Guest Posts: 52,454

    A reporter would like to speak to a car shopper under the age of 34 who is unsure whether you should lease or buy. If this is you, please send your daytime contact info to [email protected] by Friday, May 2, 2014 at 10 a.m. PT/1 p.m. ET.

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