Tips For Negotiating A Car Lease

Negotiating a car lease can be a rather daunting task for the savvy and experienced car buyers at the best of times. For the novice and first-time car buyer, leasing can be a difficult, confusing, and time-consuming ordeal. Unlike the straight-up purchase of a car, leasing has its own set of idiosyncrasies. Experienced salespeople have many ways to change and manipulate the terms and conditions of a lease to the dealership’s advantage. There are however a few things you can do to make the negotiation of a lease less cumbersome. Here are just a few suggestions:

1. FIGURE OUT HOW MUCH YOU ARE WILLING TO PAY FOR THE CAR: Before commencing the car lease negotiation process, know, in advance, how much you’re willing to pay for the car. Many consumers operate under the myth that the advertised price of a car lease is non-negotiable. This could not be further from the truth. The purchase price of a car forms part of the lease contract. Therefore, a good rule of thumb is to negotiate a purchase price at the same price you would be willing to pay if you were actually buying. You can and should negotiate!

2. FIGURE OUT YOUR STARTING POINT: Never, ever, negotiate the price of a car down from the Manufactured Suggested Retail Price (MSRP). This is simply a recipe for disaster. Negotiate the price upward from the dealer invoice cost. There are a number of websites and organizations where you can purchase the dealer cost information. Buy it! The cost to you is immeasurable and will save you thousands in dollars off the purchase price.

3. DON’T TIP YOUR HAND: Hold the balance of power in negotiations. If you know what car you want and what you’re willing to pay, negotiate the purchase price of the car first before discussing any leasing options with the salesman unless of course you’re responding to a specific make and model from a newspaper advertisement.

4. OPTION AND FEATURES: One thing to bear in mind when negotiating a car lease is that adding additional options and features can and will significantly alter the terms of a lease. Although your monthly payment may stay the same, other factors such as the purchase price, and buy-out (residual value) may increase. If you’re planning on buying the vehicle at the end of the lease term, make sure you are aware of the lease-end implications of tacking on extras.

5. PLAY HARD BALL: Many consumers are of the notion that dealerships hold all the cards during negotiations. Obviously they can if you allow them to. However, with the proliferation of the internet, consumers nowadays have more options than ever. If you don’t like the way negotiations are proceeding or the manner in which the salesman is strong-arming you, be prepared to walk. Leave your name and number and if they are anxious to consummate a deal, they will be in touch. If not, walk away, and try another dealership.

6. UNDERSTAND THE NATURE OF A LEASE CONTRACT: Lease contracts are just that – a contract! Legally binding in a court of law. As with any contract you are bound by the terms and conditions that have been mutually agreed upon. Before signing your name to any lease contract be sure to familiarize yourself and read all the pages you’re asked to sign. Ask questions if you are unsure of anything. And finally, have an independent third party go over the lease with you in the absence of the salesperson. Because remember this: Terminating your car lease early, for whatever reason, can cost you a lot more than the remaining balance you owe on the lease.

Leasing a car has never been more popular. With today’s incentives, rebates, and zero percent deals, car leasing can be a financially better option than buying. But, with all the advantages to leasing there are some downsides. Don’t be overwhelmed though! Preparing yourself for lease negotiations by following these six simple tips will improve your odds of negotiating that optimal lease arrangement.