11 Tips for Negotiating the Best Deal on Your Car Lease
Many personal finance blogs will tell you leasing a car is a bad move, but that’s not to say it may never make sense for you.
Maybe you like the idea of not having to worry about increasing repair costs. Maybe you don’t want the hassle of selling a used car down the road. Heck, maybe you just like the idea of driving a shiny, new car every few years.
The whole point of managing your money smartly is so you can afford to live the lifestyle you want. If you’re willing to cut back in other areas to budget for an auto lease, that’s your prerogative.
That said, plenty of people have gotten themselves into financial trouble by negotiating a car lease without doing their research first.
11 Tips on How to Negotiate a Car Lease
1. Know Your Numbers
A lease has more components than just the monthly payments, so make sure you sit down ahead of time and figure out how much you’re able (and willing) to spend on:
- The down payment
- The total cost of the car (known as the “cap cost”)
- The mileage limit (i.e. how many miles your lease allows you to drive per month before the lease company charges excess-mileage fees)
- The buyout or purchase-option price (i.e. what you must pay at the end of the lease if you choose to purchase the car).
If you have a vehicle you plan to trade in, visit Kelley Blue Book to find out how much it’s really worth so the dealer doesn’t shortchange you.
2. Know What You Want
Showing up at a dealership without a particular car in mind is like showing up with a sign around your neck that reads, “I’m open to the priciest option you can sell me!”
Do your research ahead of time to find out what makes and models are the best for your needs, and also give some serious thought to the options you can’t live without and those you can.
Showing up knowing your stuff keeps you from getting pushed into more car than you need — and it also sets a solid first impression that you’re on top of things and won’t be easily persuaded.
3. Get Quotes Ahead of Time
Try contacting a dealership’s internet sales department to get a quote before you visit the lot.
It’s pretty hard to let a salesperson lowball you when you already have a quote in hand from their dealership.
4. Test-Drive the Dealership (and the Salesperson)
Most of us check out online reviews before trying out a new restaurant. Why shouldn’t you do the same when you’re about to make a much bigger purchase?
For example, Edmunds.com offers a dealer ratings and reviews page where you can read other customers’ experiences at area dealerships.
It also has this clever strategy for checking out potential salespeople. (Did you know you could do that?)
5. Check Dealership Inventory
If your ideal car is in stock (read: sitting on the lot taking up valuable space), you’ve got an immediate upper hand in negotiating a car lease.
If a salesperson has to get a car for you from another location, they can play the “I’m doing you a favor by going out of my way” card.
But if you’re offering to take a car off their hands, you can play the “I’m doing you a favor by helping you move this off your lot” card.
6. Go on a Good Day
The old saying “Never shop on an empty stomach” doesn’t only hold true for grocery stores.
If you visit a dealership when you’re feeling off your game (hungry, sick, tired, etc.), you’ll be less clear-headed and easier to push into a bad deal because you’ll want to just get things over with.
Go when you’re feeling rested and ready to handle the stress of negotiations.
Also, try to start shopping for your next car before your current car completely breaks down on you, so you’re not stressed into making a quick purchase without thinking things through.
7. Bring Backup
Even if you feel fairly confident in your negotiating skills, it always helps to have someone along to keep you on track.
Whether it’s a friend, family member or a co-worker who’s good at looking intimidating, bring someone who can point out the pitfalls of a potential deal, remind you of your original budget and prevent you from falling for any sweet-talk trickery.
8. Keep Your Phone Out
Plenty of apps can give you real-time assistance with how to negotiate a car lease — even during the conversation.
TrueCar shows you what other customers have paid for similar cars at a dealership.
The Cars.com app lets you compare in-stock vehicles at several local dealerships side by side and also helps you calculate loan terms based on current negotiations or your budget.
Not only do these apps help you be armed and ready, they send a clear signal to the salesperson that you’re not someone they can take for a ride.
9. Check the Date
Chances are, there’s one key bit of information you’ve likely been overlooking as you browse cars at the dealership, and it could give you extra leverage: the manufacture date.
We all look at a car’s window sticker, which tells us things like price and fuel mileage, but don’t forget to check out the manufacturer’s sticker (usually found on a vehicle’s driver’s side door). On the upper left-hand corner of the sticker, you’ll see a date and month, which tells you when the car rolled off the production line.
The further in the past that date is, the longer the car has been sitting on the lot — and the more the dealer has had to pay carrying costs on it. Meaning: They’re ready to get rid of this car.
10. Negotiate a Car Lease Like a Purchase
One of the easiest ways to get roped into agreeing to spend more than you want is by focusing only a lease’s monthly payment. This gives the dealer leverage to zing you on other lease terms. (See this diagram of the “cash flow shell game” to see how this works.)
To get the best deal, negotiate the cap cost first, as though you intend to purchase the car outright.
In fact, don’t even mention leasing until you and the dealer agree on a price. Once that’s settled, then you can bring up financing options (which include leasing).
11. Be Ready to Walk Out
If you seem to be getting nowhere with a salesperson, don’t be afraid to simply leave.
One of two things will happen: The salesperson will panic and stop you halfway out the door to try sweetening the deal, or he’ll let you leave — in which case you can go find a dealership that is willing to work with you.
Kelly Gurnett is a contributor to The Penny Hoarder.