Overview
This video provides a step-by-step method to negotiate the lowest possible lease payment on a car, emphasizing research, calculation, and negotiation strategies to maximize savings.
Determining Lease Requirements
- Assess the exact make, model, lease term, and annual mileage desired.
- Record these details as they form the foundation for your research and negotiations.
Researching Lease Variables
- Determine the vehicle's residual value using forums like Edmunds.com or CarGurus.com.
- Understand that residual value is set by the manufacturer and is generally not negotiable.
- Find the money factor (interest rate equivalent) via the same sources or from dealers.
Using a Lease Payment Calculator
- Enter the residual value, money factor, and MSRP into a lease calculator to estimate monthly payments.
- The key negotiable figure is the capitalization cost (actual sale price of the car).
- Aim to negotiate the cap cost at least 10–20% lower than MSRP to reduce payments.
Negotiation Strategy
- Call multiple dealers, starting with those farther away, and cite your research and offered cap cost.
- Use the suggested negotiation script to demonstrate knowledge and intent.
- Adjust your cap cost offer based on dealer reactions to find a reasonable deal.
- Consult forums like leasehacker.com to compare deals and refine your offer.
Down Payments, Rebates, and Fees
- Avoid putting money down; focus negotiations on cap cost, not monthly payments.
- Putting money down carries financial risk if the car is stolen or totaled.
- Seek out models with manufacturer rebates or incentives to further lower costs.
- Expect to pay the first month's payment and possibly additional fees at signing; consider bundling fees if the interest rate is low.
Final Thoughts and Best Practices
- Treat dealership staff respectfully; recognize their role in the process.
- Leasing suits those who prefer new vehicles regularly or have a business use case.
- Consider financing instead if you drive extensively or want a car likely to retain value.
Recommendations / Advice
- Focus negotiations on the car’s sale price (cap cost), not just the monthly payment.
- Always opt for zero down payment to minimize financial risk.
- Monitor rebates and incentives regularly, as they change monthly.