How to Negotiate a Car Lease [7 Steps] | FINN (2024)

How to negotiate a car lease in 7 steps

Educating yourself on car lease terms before you start looking into lease deals can help you get a leg up on the average consumer. Terms like capitalized cost, annual mileage, market value, and capitalized cost reduction can help you better navigate a lease offer. Here are the seven steps to negotiate a car lease once you’re ready to get in the driver’s seat.

1. Pick out your make and model

Ask yourself what make and model you’d like to lease and why, and if you want to lease a brand-new car or a used car. Consider your daily commute, what features you’re looking for, and what type of leased vehicle best suits your needs. If you’re not loyal to a make or model, write down your needs and wants. Verify car insurance coverage costs, especially if you want to lease a new vehicle.

2. Determine your budget

Calculate how much you can spend on a lease overall and what monthly payments fit your budget. Remember that salespeople tend to put pressure on your monthly payment, but a dip here can suddenly resurface as an additional fee later on. Figuring out your monthly payment as if you were buying the car is often the best way to think about coming up with your desired monthly lease payment and protect your personal finances.

3. Verify your credit score

Your lease money factor depends heavily upon your credit score, so request a free credit report to check your score. Verify any details on your credit report are correct. If you have poor credit, it’s often best to improve your score before you search for a lease deal. You’ll pay less for your lease with a higher credit score.

4. Shop around

Now that you’ve got the critical groundwork laid to find the best lease for your situation, it’s time to compare offers from several dealerships in the area. If you’re not loyal to a brand, compare offers from several automotive manufacturers to see which offers you the best bang for your buck. Keep a notebook with all the offers you encounter to easily reference dealerships or leasing companies when you’re ready to move on to the next step. It’s a good idea to consider the lease deal similar to a car loan in reducing the value of the vehicle to pay less for your lease.

5. Test drive various models

If you’re someone who already knows what make and model you want to drive, you don’t necessarily have to complete this step. However, it’s a good idea to go for a spin in a car you plan on leasing to ensure everything is on the up-and-up. If you’re unsure which model to lease, test-driving a few can help you make a more informed decision.

6. Negotiate

Lease negotiations look as different as the numerous lease deals available. Many future lessees start with the purchase price of the vehicle, but they also ask lessors about incentives, discounts, specials, and dealer rebates to reduce the price of the car. If the worst that comes of asking after these cost reductions is a “no,” you’ve neither gained nor lost anything.

Part of negotiating is also understanding what you can haggle. In a lease deal, negotiables include the capitalized cost, mileage limit, lease buyout price, disposition fee, down payment, and any trade-in value as applicable. You want to minimize the difference between the capitalized cost and residual value to lower your monthly payment. Choosing the appropriate number of miles can also help you avoid paying excess mileage charges upon the end of the lease term.

7. Seal the deal

Once you’ve found the auto lease deal you want, all that’s left is to make it official. Remember, don’t sign the lease agreement until you’ve checked the dealership’s calculations against your own. Clarify any confusion points in the lease agreement to iron out the last few details. Then, it’s time to drive away in your newly negotiated leased car.

What can’t be negotiated in a car lease

Try as you might, you can’t negotiate everything in a car lease. The following aspects represent areas where your negotiations will be futile:

• Residual value
• Acquisition fee
• Disposition fee
• Promotional offers
• Taxes
• Registration and titling

Depending on the leasing company, lender, or dealership you work with, you may be able to negotiate a lower money factor. However, this figure is less negotiable than others based on its dependence on your credit score. If you have a lower credit score, you’ll likely pay a higher money factor regardless. The opposite is true if you have a high credit score.

Knowing what you can and cannot negotiate is critical in finding the best car leasing deals. Read on to learn more about how to negotiate a better deal and drive away having succeeded.

More tips for negotiating a car lease

Everyone negotiates differently, each with their own rates of success. Below are additional tips you can use to negotiate a better lease deal:

• Alert the salesperson upfront that you’re ready to talk business and agree on a deal
• Learn as much about leasing as you can before you step foot in a dealership
• Avoid any add-ons a leasing company or dealership might offer
• Ask about any additional fees
• Learn how to negotiate a fair trade-in value of the car you want to part with, if applicable
• Avoid discussing monthly payments and focus on the overall lease cost instead
• Never give the dealer a deposit to hold a car
• Like car buying, negotiate during a slow period when you feel at your best
• Let the dealership or leasing company know you’d like to purchase the car at the end of your lease, if a purchase option exists
• Don’t drive the car home or agree to any terms before you sign the paperwork
• Purchase an additional mileage allowance if you’re afraid you’ll exceed your limit

Key to any negotiating tactic is remaining calm, collected, and comfortable. If you get the feeling something just doesn’t feel right, don’t hesitate to remove yourself from the situation. No lease deal is worth compromising your position.