Are you in the market for a new car? Do you want to get your hands on a newer model, but don’t have the budget to buy one in your price range? That’s where leasing a car can be such a great option.
However, the process to negotiate the terms of that car lease can be frustrating. Many people fear car leases because of the minor details that might come back to bite them later. As long as you negotiate it well, you’ll never have to worry about that.
See below for how to negotiate a car lease for your next vehicle. Be sure to use all the tips to your advantage.
1. Conduct Research
The people that get themselves into trouble with car leases are the same ones that walk on the lot of one car dealership expecting to walk away with an amazing deal.
If you haven’t done thorough amounts of research on car deals, then you’re setting yourself up for failure from the start.
When you take the time to research leases online, you’ll have a better idea of what you’re looking for. This might be things like the price on the lease, the duration of the lease, the vehicle model it applies for, and so on.
Start by reading up on these offers to get an idea of what a lease looks like from a reputable dealership. From there, you’ll know what to expect on the lease you set yourself up with.
2. Understand the Process
You wouldn’t play basketball without understanding the rules first. You wouldn’t sign off on a business loan without a deeper dive into what the details are.
The same thing goes for a car lease. Too many people set themselves up with a lease without understanding the long-term goal of it.
Whenever you purchase a car, you finance it for the necessary amount and make monthly payments towards it. Once you’ve completely paid off the car, you become the sole owner of it.
However, the main advantage of leasing a car is that you can make payments that are lower than when you finance a car. However, whenever that lease is up, you don’t own the car.
When the lease ends, you have two options: return it to the dealership or purchase it for a price that’s set in the lease’s buyout option (if applicable).
To determine the best leasing option for you and your family, you need to think about the long haul. Are you wanting to buy the car at the end of your lease or lease another car?
3. Know What to Negotiate
The beauty of car leases is how flexible they can be. You and your car dealer can sort through several different aspects of the lease during negotiations in order to find the best fit.
It would be advantageous to know what aspects you should negotiate before walking into a dealership to do so.
First, you may or may not be able to negotiate the rent charge. Some dealers set the rent charge and won’t budge on it. Basically, you just want to ensure the rent charge lines up with what other dealerships are offering.
You’ll also want to negotiate the mileage allowance. This is the maximum amount of miles that you’re allowed to tack onto the car each year. Generally, a reasonable rate is anywhere between 12,000 and 15,000 miles annually. Be sure to consider your morning commute.
Lastly, you should consider negotiating the capitalized cost. This is essentially the price that you’ve agreed to pay for the vehicle you’re leasing. Make sure that this price is lower than what it actually costs to buy the car.
4. Keep Your Options Open
If you’re really out to get the best deal on a car lease, then you can’t have one specific car in mind. You need to keep all options on the table in order to prioritize your finances.
Dealerships can only budge on a car lease so much. So going into negotiations with one car model in mind might still put you in a tricky financial situation.
Be sure to take the time and think through all of the different car models that you might have interest in. After that, perform some research to see what those cars typically lease for in the newest model.
Don’t be surprised if you walk on the lot and find another car model that you’re interested in. This can help you find the perfect car lease.
5. Familiarize Yourself With Lease Terminology
The worst thing you can do in negotiations is to walk in with almost no concept of lease terminology. Some sellers might try to take advantage of that.
Be sure to look up and familiarize yourself with terms such as residual value, disposition fee, gross capitalized cost, rent charge, and money factor.
All of these terms play an important role in finding the right lease for your situation. You don’t have to stay up late at night memorizing the deep definition of them. Just knowing what they refer to in the lease will help you during negotiations.
Negotiate a Car Lease for Your Situation Today
Now that you have seen an in-depth guide on how to negotiate a car lease and the best tips for doing so, be sure to use it to your advantage.
Start by performing some research on the different car models you might be interested in leasing. Then hit the internet to find several lease offers from different dealers.
Be sure to browse our website for more articles relating to leasing a car, as well as many other topics that you might find helpful.