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How to negotiate a car lease Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive tools and financial calculators as well as publishing unique and impartial content, by enabling users to conduct research and compare information for free to help you make financial decisions with confidence. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that appear on this website are provided by companies who pay us. This compensation can affect the way and when products are listed on the site, such as the sequence in which they be listed within the categories of listing in the event that they are not permitted by law for our mortgage home equity, mortgage and other products for home loans. But this compensation does not influence the information we provide, or the reviews you see 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 minutes read. Published on August 9, 2022.
Written by Allison Martin Written by

Allison Martin's career began more than 10 years ago as a digital content strategist. She's been published in several leading financial publications 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 since late 2021. They are dedicated to helping readers gain the confidence to manage their finances by providing clear, well-researched information that break down complex subjects into bite-sized pieces.









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Are you considering a car lease that lets you drive in style for a fraction of what you'd pay for the new car you want? Understanding the car lease process, including getting familiar with the business terminology, as well as the specifics of lease agreements, is an important part of landing a good deal. The process of looking around and researching specials and offers from multiple dealers is another great way to help negotiate a car lease with confidence and ensure that you receive the best possible lease agreement to meet your needs. If you visit the dealership to purchase an automobile the salesperson is expecting you to make an offer lower than the price they are asking for. It's not often the case with lease deals, but it is possible to follow this step-bystep procedure to negotiate a lease. 1. Be aware of the terminology It's easy to get overwhelmed with the , especially if you do not work in the automotive sector. But, you can give yourself a slight advantage by learning the terms used by dealers prior to when you sit down for signing a lease contract. Here are some commonly used lease terms used by dealers. Acquisition fee The acquisition fee, which is sometimes called the assignment fee or the origination fee is a charge imposed by the dealer in order to establish the lease. The amount of this fee can vary from , in accordance with Edmunds. If you don't have the funds to pay for the acquisition fees up front when you sign the lease contract you can roll it into your monthly lease payment. Buyout cost A lease buyout typically requires the purchase of a leased car at the conclusion of the lease, or, in certain cases, prior to the scheduled end date. The purchase price is the amount that the dealer will charge if you decide to take this step. Cost reduction cap Cap reductionor capital cost reduction -- are any up-front payments that lower the amount of money you are able to finance. It could be a result of trade-in credits or incentives, rebates, and even making a larger down payment. Disposition fees Disposition fees are the costs associated with cleaning and preparing the vehicle to keep it in good condition to allow someone else to buy it when you return it. Gross capitalized cost The vehicle's cost of sale, also referred to as the market value is the gross capitalized cost. "This can be described as a fancy term for the price of the car, plus any other charges tax, balances and balances," says David Undercoffler who is the editor-in-chief at Autolist. Residual value The Residual value represents a projection of what the car will be worth at expiration of the lease. This figure is determined by depreciation as well as industry information. "With the residual value, the seller will estimate what the car will be worth when you turn it in," says Mike Quincy who is an auto tester and writer of Consumer Reports. "It's established at the start of the lease, and then used in calculating your base monthly payment." 2. Find deals Google search for "special lease deals" isn't enough to find the most value. Go further by creating a list of all the specials you find and think about expanding your search to other areas of the city you live in. When you've compiled the list of lease offers for your preferred makes and models, contact each dealership to confirm the details. Also, you should be aware of any other deals that aren't advertised online. 3. Begin negotiations when you pare down your list, schedule a visit to the dealership. Try out the vehicles you're considering and begin the negotiations. Some items the dealer may be willing to discuss include the purchase price. Are you planning to buy out close the lease? If so, the dealership might be willing to offer you an arrangement on the buyout cost. "This is a good cost to negotiate before the start of the lease if you feel there's a good chance that you'll decide to purchase the vehicle at the end period," says Undercoffler. Negotiating the buyout price up front is particularly important as it's typically not possible to negotiate the cost once a lease ends, says Undercoffler. Disposition fee You may be able to get a break on the fee for disposition in the event that you do not intend to sell the car or exchange it for another lease when the lease contract expires. Make sure to negotiate it at the start instead of trying to get around it after the expiration period. Gross capitalized cost is often the reason that dealerships use a low monthly payment as a selling point to entice buyers. But, it is important to try to negotiate the vehicle's selling price, which is also its capitalized gross price. By negotiating, you may be able to get an affordable monthly payment without having to resort to extending the lease term. "The capitalized gross cost will affect the monthly payment as well as the final purchase amount of the car. The cost is 100% negotiable," says Nathan McAlpine, owner of CarMate which is an auto broker firm. However, in certain situations like when a dealer is offering the lease at a particular monthly rate the cost could be difficult to negotiate. In such instances the lease terms are usually preset, says Undercoffler. Amount of mileage Most leases restrict the number of miles you can drive, usually to 10,000 to 12,000 miles annually. If you exceed this annual limit the lease will impose the possibility of paying a fine. Do not be enticed into accepting an allowance for mileage that is low if you are a frequent driver. Instead, you should request a larger 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 be driving more than the mileage allowance and you're not sure, it's a good idea to negotiate a greater cap on your mileage in exchange for an upfront feeor with no cost in the first place, instead of getting hit with the per-mile penalty when the lease ends," says Undercoffler. "Just know that if you agree to a higher mileage limit that it will reduce the residual value of the vehicle as well as the amount of buyout, as the car will theoretically have more miles." When negotiating your allowance for mileage, you need to know about how many miles per year you typically take. "If you pay for extra miles upfront and you don't get the money back if you don't take advantage of them," says Quincy. Money factor The money factor is the rate of interest you pay to lease the vehicle. If you have excellent credit -- generally 740 or more- you shouldn't have any issues obtaining the lowest interest rate that the dealership offers. 4. Seal the deal You'll want to read through the entire lease agreement prior to sealing the deal. Lease agreements usually contain the following information: The required down payment the amount of down payment, if there's one. The price of the lease which is sometimes referred to as the money factor or rent cost. The value of the car at the beginning and end in the term. The annual mileage limit. A comprehensive fee schedule that includes the cost in wear and tear and excess damage, and any other costs you might incur at the conclusion your lease. Costs to terminate the lease early. What can't be negotiated While you may negotiate various charges, there are limitations. You won't get much success negotiating the following: Acquisition fee Dealerships usually won't waive this administrative fee but will allow you to add it to the lease's payment, if you require. Residual value: This number is not negotiable since it accounts for depreciation and industry statistics. Also, lowering the value of residuals too far could cause the dealer to be unable to recover the cost if you decide to purchase the vehicle instead of selling it. The bottom line is it is possible to find a great bargain on a lease for a car however you must do your homework be sure to do your research prior to going to the dealership. It's not just important to learn the jargon dealers employ as well, but it is also important to compare offers from multiple dealerships, learn what's negotiable and study the fine print on the lease contract prior to signing the agreement. Find out more


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Written by

Allison Martin's career started over 10 years ago as a digital content strategist. She's been published in several leading financial publications, including The Wall Street Journal, MSN Money, MoneyTalksNews , Investopedia, Experian and Credit.com.



Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to control their finances by providing clear, well-researched information that break down complex topics into digestible chunks.






Auto loans editor




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