How to Get a Good Deal on a Car Lease

Not everyone wants to buy a car or is necessarily in a position to do so, which is why leasing has arisen as a popular alternative. Much like “renting” a home instead of buying it, some of the advantages of leasing include the choice to trade out your vehicle every couple years, only having to pay for the vehicle for the time period in which you drive it and paying less per month than you would if you were financing the same vehicle.

While many people know that buying a car often includes negotiations, it’s not as widely known that you can negotiate on car leases, too. Knowing how to advocate for yourself and get a good deal can help you leave the dealership with the keys to a great new car and a payment plan that really fits your budget.

car lease

Here are some tips on how to get a good deal on a car lease next time around.

Consider Residual Value of the Make and Model

Some cars are simply known to hold their value better than others. The residual value is how much your vehicle will be worth come the end of you lease according to lender estimates. You’re paying the difference between this residual value and the vehicle’s price tag at the start of the lease. So, the higher the residual value, the less you end up paying over the course of the lease.

When you’re narrowing down possible manufacturers and models for leased vehicles, keep residual values in mind. Thankfully, many experts have already done the legwork of calculating the residuals and comparing them in lists like this one from U.S. News & World Report

Explore Lease Offers and Deals

If you’ve ever used coupons at the grocery store, you know how satisfying it can be to see you’ve saved money after the cashier scans the offer. Well, cars and trucks are not so different. Striking while the iron is hot means finding the best lease deals available around the time you’re preparing to get your next vehicle. These special offers can affect everything from the amount of the monthly payment to the down payment due at signing to the interest rate.

Know Which Terms Are Negotiable

Walking into the dealership knowing which terms are negotiable gives you a lot more power to work toward getting a good deal.

As Experian outlines, here are some of the key features you may be able to negotiate:

  • Capitalized cost: This is the selling price of the vehicle. Salespeople may try to emphasize the reasonable monthly payments they can get you on the lease. However, what they may end up doing is lengthening the lease to get those monthly payments down. A better approach is negotiating the “cap cost,” as this can lower your monthly payments without requiring you to lease the vehicle for longer to compensate.
  • Mileage cap: Leases dictate how many miles you can drive annually before having to pay extra fees, but you may be able to negotiate this to be higher ahead of time if you anticipate needing to drive more.
  • Interest rate: Called the “money factor” of leases, there may be some wiggle room on what interest rate you can achieve based on your credit history.
  • Buyout price: If you may buy the vehicle after your lease, mention it to the salesperson you’re working with and see if they’d reduce the price for you.

Two aspects of the lease you can expect dealerships not to budge on? Residual value and acquisition fees.

Getting a good deal on a car lease is a matter of negotiating effectively, taking advantage of relevant deals and choosing the right model for you.