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How to negotiate a car lease Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial choices by offering you interactive tools and financial calculators that provide objective and original content. This allows you to conduct research and compare data for free and help you make financial decisions with confidence. Bankrate has partnerships with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this website are provided by companies that pay us. This compensation may impact how and when products are featured on the site, such as for instance, the sequence in which they appear within the listing categories, except where prohibited by law. This applies to our mortgage, home equity and other home loan products. This compensation, however, does affect the information we provide, or the reviews you read on this site. We do not include the vast array of companies or financial offerings that could be accessible to you.



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5 min read Published August 09, 2022
Written by Allison Martin Written by

Allison Martin's work started over 10 years ago as a digital content strategist. She's been featured in a variety of top financial publications such as The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.







Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to manage their finances by providing precise, well-studied information that breaks down complicated subjects into bite-sized pieces.









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Are you considering taking a car lease to ride elegantly for only a fraction of the cost you would pay to purchase a new vehicle? Learning about the process of leasing cars, including brushing up on the business terminology, as well as the details of lease agreements, is a crucial part of landing a good deal. The process of looking around and researching specials and offers from multiple dealers is a good way to help you negotiate a lease agreement with confidence to ensure you get the best lease deal for your needs. When you go to the dealership to purchase an automobile the salesperson will expect you to offer below the price they are asking for. However, this isn't usually the case for leases, but it is possible to follow this step-by-step approach to negotiate a car lease. 1. Be aware of the terminology It's easy to get overwhelmed with the language, especially if don't work in the automotive sector. But, you can give yourself an advantage by understanding the jargon dealers use before you go in front of a leasing agreement. Here are some of the most common lease-related terms that dealers use. Acquisition fee This fee which is sometimes called the assignment fee, or even the origination fee, is assessed by the dealer in order to establish the lease. This cost can range from $0 to $1000, according to Edmunds. If you don't have enough money to pay the purchase fees upfront when you sign the lease contract you can roll it into your monthly lease payment. Price for buyout A lease buyout usually requires the purchase of a leased car at the conclusion of the lease, or in some cases prior to the deadline for ending. The buyout price is the amount the dealer would charge, should you opt to do this. Reduced cost of capCap cost- or capital cost reduction are the upfront charges that decrease the amount you finance. This can include trade-in credit as well as rebates, incentives and even making a larger down payment. Disposition fees Disposition fees are the cost of cleaning your vehicle and keeping it in good condition to be sold to someone else when you return it. Gross capitalized cost The car's cost of sale, also referred to by the term "market value is the cost that has been capitalized gross. "This may be a fancy term for the price of the vehicle plus any other charges, balances, and taxes," says David Undercoffler, editor in chief of Autolist. Residual value The Residual value represents a projection of the value of the vehicle that it will be worth at the expiration of the lease. The value is calculated by depreciation and industry data. "With the residual value, the seller will estimate what the car will be worth when you turn it over," says Mike Quincy, auto tester and writer for Consumer Reports. "It's established at the start of the lease and used to calculate your monthly base payment." 2. Look for deals Google search of "special lease deals" isn't enough to find the most value. Go further by creating an outline of all the specials you find and then consider expanding your search to other areas of your city. After you have the list of lease offers that you like on the top brands and models, call each dealership to confirm the particulars. You should also inquire about any other offers that aren't advertised online. 3. Begin negotiations when you pare down your list, schedule an appointment with the dealer. Test drive the vehicles you are considering and start the discussions. Some items the dealer may be willing to discuss include the price of the buyout Do you intend to purchase the vehicle at the end of the lease? If yes, the dealer could be willing to give you a deal on the buyout price. "This is an excellent price to negotiate at the beginning of the lease if you think there's a good chance that you'll decide to purchase the car at the end period," says Undercoffler. Negotiating the price of the buyout up front is particularly important as it's typically impossible to negotiate this expense once a lease ends, says Undercoffler. Disposition fee You can get a break on the fee for disposition if you don't intend to turn the vehicle in or exchange it to another lease once the lease expires. Make sure to negotiate it prior to the start of the lease instead of trying to get around it at the end period. Gross capitalized cost is often the reason that dealerships will use the low monthly payments as a selling point to entice customers. However, you should always attempt to negotiate the car's selling price, which is also its gross capitalized cost. If you negotiate, you might be able to negotiate an affordable monthly payment without having to resort to prolonging the lease. "The capitalized gross cost will impact the monthly installment as well as the final purchase amount of the car. The price is completely negociable," says Nathan McAlpine the owner of CarMate which is an auto broker company. In certain circumstances, however like when dealers are offering the lease at a particular monthly rate the cost could be harder to bargain. In such instances, the lease terms are generally predetermined, according to Undercoffler. Mileage allowance Most leases restrict the number of miles you may drive -- usually between 10,000 to 12,000 miles annually. And if you exceed the limit each year the lease will impose an additional fee to be paid. Beware of being enticed by the lowest mileage allowance when you drive a lot. Instead, request a higher allowance at a lower cost at the time of establishing the lease in order to save yourself cash when you are ready to turn the car in. "If you are certain that you will exceed the mileage allowance and you're not sure, it's a good idea to negotiate a higher mileage cap for an up-front fee, or no fee at all, rather than getting hit with the per-mile penalty when the lease expires," says Undercoffler. "Just be aware that if bargain for a higher cap on mileage, it's going to decrease the residual value of the vehicle and the buyout amount, since it will theoretically put more miles on it." When negotiating your allowance for mileage, you need to be aware of the number of miles per year you typically take. "If you pay for extra miles in advance but you can't claim the amount back if don't use the miles," says Quincy. The money factor determines the rate of interest you pay to lease the car. If you have very good credit, which is typically 740 or higher -- you shouldn't have difficulty securing the lowest interest rate the dealership offers. 4. Sign the contract You'll need to read through the entire lease agreement prior to signing the contract. Lease agreements usually contain the following information: The required down payment the amount of down payment, if there's one. The lease's cost which is sometimes referred to as the rent factor or money cost. The value of the vehicle at the beginning and at the end in the term. The annual mileage limitation. A comprehensive fee schedule, which includes the cost for wear and tear excessive damage and other charges you might incur at the conclusion your lease. The cost of ending the lease earlier. What cannot be negotiated? Although you are able to negotiate a variety of charges, there are limitations. You won't have much luck negotiating the following: Acquisition fee: Dealerships generally won't waive this administrative fee but will allow you to add it to the lease payment should you need to. Residual value is not negotiable since it is a way to account for depreciation as well as information from the industry. Plus, lowering the residual value too far could cause the dealer to be unable to recover the cost if you decide to buy the vehicle rather than turning it in. The bottom line is that it's possible to find a great deal on a car lease, but you'll want to be sure to do your research prior to going to the dealership. Not only is it important to learn the jargon dealerships use as well, but it is also important to examine offers from various dealerships, know what's negotiating and study the fine print of the lease contract prior to signing the contract. Find out more


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Written by

Allison Martin's work began over 10 years prior to that as a digital content strategist. Since then, she's been featured in a variety of top financial outlets, including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.



Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate from late 2021. They are dedicated to helping readers gain confidence to take control of their finances through providing concise, well-researched and well-researched content that breaks down complicated topics into digestible chunks.






Auto loans editor




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