4 Tips for Negotiating a New Vehicle Lease

You can take control in negotiating your new vehicle lease by understanding how leasing works, preparing in advance of any negotiations, taking the time to shop and knowing when you need to walk away from a deal.

Lease Basics

Your lease payment covers the depreciation on the car while you drive it plus the cost of having the dealer’s or lease company’s money tied up in the car (they own it) for the duration of your lease. Here are a few other basic things you should be familiar with:

  • The monthly payment of your new vehicle lease is determined by the cap cost, or price of the new vehicle
  • The residual value of the vehicle is valued once the lease is over
  • Lease rate can be considered as an interest rate
  • The length of your lease is an important consideration
  • The number of miles you drive
  • Your lease payment covers the depreciation on the car while you drive it plus the cost of having the dealer’s or lease company’s money tied up in the car (they own it) for the duration of your lease.
  • Cash due at signing is sometimes added to your monthly payment, including interest charges

Be Prepared

You will improve your chances of getting your best deal by being prepared before you walk into the auto dealership. First, know what monthly payment you are comfortable with. Second, know the type of car you can afford at that amount. Third, have documentation ready for the lease application, including expected cash out of hand.

Some dealers will tell you that leases are not negotiable. This is not true. While the dealer cannot negotiate the residual value of the vehicle, the initial price and the lease rate can certainly be negotiated. Be prepared by knowing the dealer and wholesale cost of the car you’re interested in and by being aware of any sales or specials the dealer may be offering. The dealer will want to talk about the monthly payment you desire. You need to talk first about the cap cost, or agreed price of the vehicle you are leasing.

Take the Time to Shop

You should let a dealer know you are ready to sign a lease that day, and you should be prepared to do so. At the same time, be clear that you are willing to shop to find the best deal. Your preparation will help you work toward the best new vehicle lease you can get, but there may be dealer incentives you were not aware of. Take the time to go to several dealers offering the car you want or with cars in the price range you want and see what specials might be available.

Be Ready to Walk Away

These tips are to help you negotiate the best new vehicle lease you can, not just get in a car as quickly as possible. Negotiations where you are willing to walk away give you great strength. If the purchase doesn’t meet the goals you established in advance, be prepared to negotiate or walk away.


Need an Auto Loan? Get a Free Quote Here!