- If you choose the right vehicle, you can avoid expensive monthly payments. Before you head to the dealership, know exactly what car you want. In addition, know the options you desire. You should know as much as the dealer does about the car you wish to lease. Avoid choosing models that have been regarded as having safety problems or have been involved in large factory recalls. Also, avoid models that tend to change drastically every year because they fail to retain their initial value; they are more expensive to lease. The right model has a high residual value, or wholesale value at the end of the lease. Higher residual values equate to lower monthly payments.
- Before you walk into a car dealership to negotiate a deal, do your homework on the car you desire. You should never pay the listed price, or the Manufacturer's Suggested Retail Price (MSRP) of a car for lease. To know the right price, find the factory invoice price, what the dealer paid the manufacturer for the car. Find this price from popular automobile sites such as Edmunds.com. When you subtract the list price from the factory invoice price, you will see the markup. For instance, a car with an MSRP of $40,000 but a factory invoice price of $35,000 makes the car dealer $5,000 in profit. Knowing how much a dealership pays will help you lower the price.
- The rule of thumb is to negotiate from the factory invoice price up. For example, offer $300 to $500 over the factory invoice price of cars that have an MSRP of up to $25,000. In the eyes of some dealerships selling cars up to $25,000, this may be too low, so expect to pay more. For cars being sold for up to $40,000, offer at least $500 but no more than $1,000 over the factory invoice price unless the dealer starts complaining that your offer is too low. For cars that exceed $40,000, expect to pay at least $2,000 to $3,000. Remember that the goal of negotiating is to obtain an agreement in which the dealer still makes a satisfactory profit while you get a fair lease.
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