How to Negotiate the Best Car Lease Terms in 2021: Strategies For Success

Last Updated on June 9, 2021

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Negotiating a car lease can be scary, especially if it’s your first time. The thing is: you and the dealer want the same thing, to drive a car off the lot. Here’s how you can negotiate the best car lease terms.

Should You Lease or Buy?

While buying is generally the best option for your wallet over time, there are plenty of reasons to lease. Some people don’t want to risk dumping huge amounts into growing mechanic bills, and others don’t want the hassle of re-selling the used car when it’s time for an upgrade. For most, leasing is a flexible and often more affordable way to purchase a new car every few years. When you’ve decided leasing is the option for you, make sure you’re ready to get the best bang for your buck.

How to Negotiate

Before you head to the car dealership, you’ll want to be prepared. Leasing has a very strict set of vocabulary words you’ll want to know before speaking with the salesperson. Most dealers can spot a newbie from a mile away, so don’t let them take advantage. Keep these words in mind when negotiating.

The lessor is the car dealer or leasing company. You are the lessee who is leasing the vehicle.

Residual value is the value of the car after the lease ends. This is an important number which the lessor determines based on the expected future value of the vehicle. The residual value plays a role in your car lease and can increase or decrease the cost to you.

The rent charge is what the lessee pays monthly to operate the car. In a similar fashion to renting an apartment, you’ll pay the bill monthly to the lessor, in exchange for use of the vehicle.

Gross capitalized cost is the combination of the price of the vehicle, plus additional services and fees agreed upon at the time of signing. Essentially it is the total cost to you.

The disposition fee is what the lessor may charge if you return the vehicle before the lease is up. This fee is usually decided ahead of time to prevent the lessee from ending monthly payments too soon.

A closed-end lease is the kind of car lease you likely want. This lease has an agreed-upon future value at the beginning of the contract, so you won’t be caught with additional fees if the car depreciates in value at the end of the lease.

Research!

This is the most important tool in your arsenal. A finely tuned car drives faster and longer. So you need to ready yourself for negotiations. Here’s what you need to know:

  • Find cars in your price range. Have a few different options in mind so when you walk into the dealership, you aren’t forced to spend more money than you have to on upgrades you won’t use. Know the make, model, and year of each car that you might want, and find the best deal from your car dealership.
  • Once you have a few cars in mind, check the dealership website to know what they have in stock. To save money and have the upper hand in negotiations, leasing a car they have in the lot will be better than if the salesperson is forced to order the car specifically for you. Remember, they want the cars off the lot, just as much (if not more) than you want to drive it yourself.
  • Check reviews! Just like you would check reviews on an electronic device or personal service, make sure to check the reviews of your local car dealer (and each salesperson). Get other’s opinions before finding out for yourself, to prevent poor service or dealing with a hardball.

Shop Around:

Don’t just choose one dealer, have a few in mind. If things don’t work out with one, you always have a backup plan. This will also give you a better idea of the price you’ll pay for a car lease. If the dealer insists on a higher cost, you can let them know that a better deal is around the corner.

Tip: Get a quote from a dealership online before heading to the lot. This can prevent price jumps when you speak with the salesperson directly.

Negotiating:

When you’re finally ready to walk in, there are still a few things you want to consider before opening the front doors. Here are a few tools you’ll want with you for the negotiation process.

Get the best deal on your car lease with a few simple tricks: The best negotiation strategies.
Get the best deal on your car lease with a few simple tricks: The best negotiation strategies. Photo Credit: Shutterstock.com

Numbers In Mind:

Car leases don’t just come with a single cost. There are many different costs and fees that you’ll need to discuss when it comes time to sign. Know how much you’re willing to spend and how much the chosen car goes for at other dealerships. If the salesperson is upselling you, you’ll be ready to counter.

Keep An Open Mind: 

Don’t shop when you’re hungry for a car, you’ll end up spending way more than you need to. When you’re ready to lease a car, do it on a day when “having a car” isn’t as much of a “must-have” as it was the day prior. The best time is usually a week after you’ve first made your decision.

Don’t do it on impulse. The most important thing is to have the ability to leave if things go south. If you’re stuck or in a bind, the salesperson has the upper hand!

Call In Reinforcements:

Even the best operatives have reinforcements, so never negotiate alone. Even if it’s just someone to stand behind you and look intimidating. Having another perspective (especially an unbiased one) will serve you to get the best deal on your car lease. It also helps you build up the necessary courage to work the price down.

Pay Attention: 

When you’re walking the lot and you’ve finally decided on a car, make sure to check the manufacturer’s date. The longer the car’s been on the lot, the better the deal you can get. If there are multiple cars in your price range, find the one with the oldest manufacturer’s date, and negotiate!

Talk ‘Em Down:

Negotiating doesn’t just mean getting the best rent charge. There are multiple fees to worry about when leasing such as mileage allowance (how many miles you can drive the car each month), capitalized cost (the total lease payments each month), and other fees or services the dealership might offer. If the salesperson isn’t budging on one number, you may be able to talk them down on another.

The Most Important Rule In Negotiations:

Patience Is KeyIf you aren’t capable of walking out, don’t walk in. The dealer can sense the urgency and will use it against you. When things aren’t going your way, leave. Find a different place to do business!