A few years ago, “experts” inside the car leasing domain suggested that if you head down to a dealer for a car lease you shouldn’t tell him about how you plan on financing the car. They said that you should wait until a price has been set and then tell them that you want to finance the vehicle. This trick isn’t recommended anymore as it has lost its efficiency over the years.
Now, you should tell the dealer right from the start that you want to lease and that you want to talk to him about the selling price of the vehicle, not only the monthly installments that you will do. Make the dealer believe that if he offers you a good deal, you’ll accept it that very same day. When negotiating a car lease, always take into consideration the following three major advantages that you have:
1. You have the possibility to walk away and opt for another dealer. Nobody is pulling a gun to your head and force you to sign;
2. You can check out what other companies are offering and use this in order to lower the costs of the lease;
3. Probably the most important advantage would have to be that you can take your time in order to prepare and education yourself regarding cars, leasing, prices and other similar facts.
The first thing to negotiate at the dealership would have to be the lease price (aka cap cost). For this, you must have a specific target in mind. Needless to say, the lower the car’s price is, the lower the monthly payments are going to be. Do not let the dealer tell you that that price is not negotiable in a lease because this an old trick. The only situation in which the price tag is not negotiable is when you want to buy a high-demanding car and the dealer is in short supply. Other than that, the price is always negotiable.
Taking into consideration the fact that the dealer can only control the price of the car, you won’t get very far with the negotiations of the money factor and residuals as these two are controlled by the leasing company. Don’t forget to ask about any discounts, advertised specials, rebates or types of incentives that might shave off a couple of hundreds of dollars. You should also discuss about down payment, mentioning if you are willing to make one and if so, tell them how much can you pay upfront. Also, if you want to make a trade-in, negotiate a fair price for the car and by fair we mean that you should know its wholesale value in order to find out if what the dealer offers you is reasonable. Other things that you could as the dealer are: disposition fees, acquisition fees or other costs that you might have to support.
After finding a deal that at first looks good, now time has come to ask the dealer to calculate how much you will be paying every month based on what you’ve discussed. During the period in which the salesperson talks to the finance and insurance manager to figure out these numbers, you should make your own calculations and when he returns you should compare them.
Make sure that you use the exact same down payment, cap cost, money factor, and residual value and lease months as the car dealer is using and that you have taken into consideration all of the extra costs involved. If you notice something that doesn’t add up, always ask for a clear explanation. You would be surprised of how many “mistakes” these car dealers make, in their favor of course.
Here are several pointers that you should keep in mind when learning how to negotiate a car auto lease:
a) Negotiate the price up from the dealer’s cost and not down from the sticker price; b) Negotiate price, not the monthly payments; c) Don’t tell the dealer ask how much you can afford per month and don’t let him tell you that these lease prices are not negotiable; d) Don’t give the car dealer a deposit during the negotiation process; e) Don’t reveal how much you like the car during negotiations; f) Never sign a lease agreement until you have settled on a deal; g) Remember the fact that you can always walk out and search somewhere else;
h) Never negotiate if you are in a hurry or you are tired, intimidated or confused.