How to Negotiate a Good Car Lease

Leasing is a financing option available when looking at a new car. With a lease, you pay for the depreciation of the vehicle over the term of the lease. Paying this way will keep your payment lower than if you were buying the same vehicle especially when you negotiate the best deal on a new car lease. It is possible to negotiate a lease deal that saves you money.

Instructions

1

Research different vehicles to see which ones you would like to drive. Check The Edmunds website and Consumer Reports for different reviews of vehicles. Decide if you want to drive a sedan, coupe, sport utility vehicle or truck. A larger family will require a bigger vehicle. If you drive on dirt roads or in other poor road conditions, you may need a four-wheel drive sport utility vehicle or a truck. If you have a long commute, you may want to choose a vehicle with better gas mileage.

2

Go to the Edmunds and Kelley Blue Book websites to check for available leasing incentives and discounts. Many manufacturers subsidize or help fund leases on certain vehicles. If one of these subsidized models is a car you are interested in, this is a chance to save some money.

3

Negotiate the price of the vehicle as if you were buying it. The net capital cost is the amount the leasing company pays the dealership for the vehicle you want to lease. The residual value of the lease subtracted from the net capital cost is the amount you will pay off over the term of the lease. A reduction in the sales price means you pay less. Ask for bids from different dealers to get your best pricing.

4

Sit down with either the salesperson or business manager after you've taken the vehicle for a final test drive. They may try to steer you towards negotiating based on payments. Do not fall for this tactic. Continue to negotiate based on total purchase amounts. Negotiating on payments is deceiving. Many times, the dealer will lengthen the lease term to lower the monthly payment. You will pay less per month, but more over time. They may also increase the down payment amount to lower the monthly payment. If you are trading in a vehicle, the amount allowed for trade in will factor in as well.

5

Figure out the equivalent interest rate on the lease. The equivalent interest rate for a lease should be equal or close to the average interest rate you would be offered on a car loan. Call around to some banks and credit unions to get auto purchase loan interest rates for comparison. Ask the dealer for the money factor on the lease you are taking out from the dealer. The money factor is the interest the leasing company charges on the money it uses to purchase the car and lease it to you. This is a very small number expressed as a decimal. Multiply this number by 2,400 to get a number close to the an interest rate for comparison purposes. This should be around the going interest rate on new cars. If it is considerably higher try to negotiate this down, or walk away to find a better deal.