Be straight forward.

Dealers are notorious for playing games if they think you’re not familiar with the leasing process, they will 100% try to shove some hidden fees in your offer. Right away you should let the dealer know that you know that you are an educated consumer, you want to have a conversation about the selling price (not exclusively the monthly payments), and that they can leave their games at home.

Use your inherent advantages as a consumer.

As a customer, the ball is in your court. They are working for you, not the other way around. As a consumer, be sure to take advantage of your position and, subsequently, your power in this dynamic. You should:

  • Prepare and do research ahead of time about the vehicle you want, what market value is for the car, what goes into a lease price (check out the infographic on the bottom of the hyperlinked page), and customer reviews/feedback of the dealership you’re going to be visiting.
  • Leverage the fact that you are able to shop around to find the best deal – and actually do it.
  • Lastly, and most importantly, if you feel like you’re not getting a good deal, WALK AWAY. Signing a lease contractually obligates you to make consistent payments every single month for the next 2-3 years. One of the biggest mistakes people make is settling for a bad deal because they’re sick of shopping around. Don’t do it. We guarantee you will regret it.

Know the playing field.

There are certain parts of a lease that are negotiable, and there are other parts that aren’t negotiable. Knowing which are which will definitely help you hone in on which arguments are worth having and which are just losing battles. Cap cost (otherwise known as the discounted MSRP) is always negotiable, and make sure to have a specific (and realistic) target cap cost in mind. It should usually be around 10% off the MSRP.

A note on money factor and residuals

Money factor is essentially a convoluted way to say “interest rate” or APR. While the money factor SHOULDN’T be negotiable, dealers will oftentimes inflate the money factor that the bank requires in order to pocket more money on their end. Money factor in its original form comes from the leasing company/bank, so it’s difficult for consumers to tell if the dealer is inflating it or not. Additionally, depending on your credit score, your money factor can fluctuate, making it even more difficult to tell if you’re being ripped on in this respect. Your best bet is to get a bunch of quotes from different dealerships to ensure that everything is as it should be

Residuals are also non-negotiable. Residual is basically what the car is projected to be worth at the end of your leasing term. This is important because you use the residual value to calculate the depreciation value, which is essentially your raw leasing payment (without interest rate included). These come from the bank, again.

Don’t forget about rebates!

Make sure to ask your dealer about any potential rebates you may qualify for. These would include:

  • Conquest: if you’re switching car brands, manufacturers will often give you an incentivized discount to switch over to their brand
  • Loyalty: contrastingly, if you’re remaining within the same car brand as your old lease, the manufacturer will reward you by giving you an incentivized discount
  • Military: if you’re a veteran, you qualify for this discount
  • Student: if you’re a student, you qualify for this discount
  • Bonus cash: incentives from manufacturers (usually applies to everyone depending on which car you’re looking at)

Take away tips

  • Focus on negotiating selling price, not monthly payments. It makes it easier to calculate costs properly.
  • Don’t tell the dealer what you can/cannot afford – instead, give him a price based on your research and other quotes from other dealerships.
  • Find out your car’s trade in value using Kelley Blue Book
  • Play hard to get – don’t show that you love the car
  • Tell the dealer that you know your stuff (even if you maybe don’t. Confidence is key, people.)
  • Keep your head clear and have patience – again, you don’t want to be stuck in a 3 year terrible commitment just because you happened to be in a hurry to find a deal the day you went to the dealership.


Take your time. Do your research. Be in charge.

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