How To Get The Best Price On A Car Lease
When you walk into a dealership to lease a car, it's real easy to be ripped off if you're not prepared. However, with just a little bit of research beforehand, you can know almost exactly what your car lease should cost.
How does car leasing work?When you buy a car, you are paying for the full value of the vehicle. When you lease a car, you are paying for the original value of the vehicle minus the value of the vehicle at the end (known as the "residual" value) of the lease term (most often 24, 36, or 39 months) plus some interest (known as the "money factor").
Doing your researchIt is important to go into a dealership knowing a few pieces of extremely important information.
- Invoice Price
- Residual Value
- Money Factor
- Approximate Monthly Payment (that you calculate)
What about those lease ads on TV?You'll regularly see commercials on television for various lease specials. They are rarely worthwhile. Problems with lease specials:
- The vehicle being offered is likely a very specific configuration that nobody wants.
- The dealer may only offer one or two vehicles at the advertised price.
- Often a low lease price is advertised, but when you read the fine print you'll see a large down-payment is required.
- If the brand is offering a rebate or lease incentive, you can use that to your advantage on top of what we've discussed above. If BMW offers a $2,000 rebate on a 3-series, that lowers your negotiating starting point by $2,000 and that is a good thing. The dealer will likely try to pretend that's a discount they are giving you, when really it has nothing to do with the dealer.
Doing the dealWhen you walk into the dealer, a few things are very important.
- Be very friendly and polite. You want to get off on a good foot with this person... you want them to like you before they realize you're going to screw them out of part of their commission. Don't worry, even if you get the car at invoice price, they still receive a base commission, so don't feel bad.
- Don't waste their time. As noted above, the salesperson will likely be making less of a commission than normal on this deal, so making it quick for them is in your favor.
- Know what you're talking about, but don't be a dick. There is a difference between knowing your shit and being an asshole. Rarely will you get what you want by trying to strong-arm the salesman.
- Don't be afraid to walk away. The deal won't always get done the first time you walk in. If they are reluctant to give you the price you want, say thank you and leave. Chances are the manager will stop you before you leave, or the salesperson will call/email every five minutes until you come back.
A few extra tips
- Dealers work on volume not just price. So, it is in their best interest to put you in a car even if they are not making much (or any) profit on it.
- The last week of the month is a great to car shop. By the last week of the month the dealer knows what quotas they need to hit... and by leasing a car during that time, you are helping them. So, they will be much more likely to bend on price.
- The first number is never the best number. Some car salesmen will be quick to give you some degree of discount and say it's their "best price." This is a lie. Their first price is never their best price.
- Dealers want to move cars they have in-stock. So, they will be more motivated to make deals as compared to a car they need to order. This can work in your favor, if you pretend to not be interested in what they have in stock, and then act willing to settle for it for the right price.