Here are a few tips and lease secrets to keep in mind the next time you go to lease a vehicle:
- Know your monthly limit. Before going to any dealership and spending a lot of time negotiating through a lease, run the numbers at home. Use industry averages for the Money Factor and Residual and find out what the Monthly Payments will be. If it is too high for your budget and you are not sure if you can get the Selling Price down to the level you need, find a vehicle that is priced more suitable for your situation.
When speaking with a Sales Rep, avoid the conversation that includes you sharing your monthly budget with them. If they know what you can and are willing to pay, they will work extremely hard at getting you in a lesser value vehicle at a price that meets your budget.
- Go direct - cut out the Rep. The Sales Rep is only there to help you find a vehicle and to explain the different options available for that model. The numbers are handled through finance, and the sooner you get there, the sooner you will be on your way to closing the deal.
If you have ever bought or leased a vehicle in the past, you may already be aware of the "Twilight Zone" affect that occurs when the Sales Rep says to you, "Let me go talk to my finance guy." Ten minutes later (for a 30 second process) they return with a lease option that seems to be worse than the one they initially quoted you before going in.
So ask to speak directly with the finance person once you have selected your vehicle.
- Get a quoted Money Factor and Residual before running the numbers. Once you know the vehicle you want to lease, have the finance person give you a Money Factor and Residual based on the following options: 36 month lease, 12,000 miles per year, and a good credit rating - nothing more. This way you have a base to start with.
- Always negotiate the Selling Price. There are not too many things you have control over in a lease, but the one that you do (Selling Price), is the one that affects your Monthly Payments the most.
- A Down Payment that reduces the CAP Cost. When discussing a Down Payment (if one is applied), make certain that the full amount is applied to reducing the CAP Cost. Do NOT let them pull from it other fees and charges.
- Ask to see the numbers. By law, dealerships are not allowed to hide any details regarding a lease from you. They are not, however, required to show you - if you do not ask. So ask to see a breakdown of all the numbers involved in the lease. Compare them to the worksheet you will take in with you.
- Be prepared. Making a $300, $400, or $500 monthly payment for the next 3 to 5 years is not something you should take lightly. It is a lot of money that deserves a lot of respect. That respect comes in the form of doing the homework in advance, and going in prepared.
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| Good luck and enjoy the ride! |
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