If you have decided to lease a vehicle then there are some steps you can take to be sure that you get the best deal possible. First off you should know that a lease has profit to the dealer that can be negotiated just like a regular purchase does. Rebates, down payments, and trade-ins can all be added into profit. Because of the ease with which a dealer can take profit from your trade without your knowledge when leasing it is my opinion that you do not trade a vehicle. Instead of trading, sell your vehicle out right. Use the internet as well as any publications to help you determine the actual dealer cost on the vehicle you want to lease.
There are three main areas for you to negotiate on a lease; the cap cost, residual value, and interest rate. The cap cost can be negotiated just like the price would be if you were buying a car. You want the highest residual value that you can get. This is one of the reasons that many high end luxury cars like Lexus, Mercedes, and BMW have such attractive leases. Their vehicles hold their value very well. Residuals and interest rates used by each lender may be static but most dealers have access to many different companies providing leasing which will have varied options.
Look up the current residual rates online or in a publication such as the Automotive Lease Guide. The dealers residual number should be higher than what is shown in the book, if not then it isnt a factory subsidized deal and therefore you should stay away from it. Also, do the same with the APR. You can calculate the APR by multiplying the money factor in the lease by 24. With this, you are looking for the lowest APR possible.
You also want to be sure that the lease is a closed lease with a maximum term of three years. This should keep you in the factory warranty so that you dont get stuck with repairs on a car that isnt really yours.
So, what would be considered a good lease deal? For starters, you want a lease with no down payment required, a minimum of 15,000 miles per year allowed, and a monthly payment that is substantially lower than a 5 year loan would be. When you are evaluating lease deals on different vehicles always use a zero down approach to comparing them and remember that vehicles with higher resell values will be better to lease. |
