If you have decided to lease a vehicle then there are some steps
you can take to be sure that you get the best deal possible.
First off you should know that a lease has profit to the dealer
that can be negotiated just like a regular purchase does.
Rebates, down payments, and trade-ins can all be added into
profit. Because of the ease with which a dealer can take profit
from your trade without your knowledge when leasing it is my
opinion that you do not trade a vehicle. Instead of trading,
sell your vehicle out right. Use the internet as well as any
publications to help you determine the actual dealer cost on the
vehicle you want to lease.
There are three main areas for you to negotiate on a lease; the
cap cost, residual value, and interest rate. The cap cost can be
negotiated just like the price would be if you were buying a
car. You want the highest residual value that you can get. This
is one of the reasons that many high end luxury cars like Lexus,
Mercedes, and BMW have such attractive leases. Their vehicles
hold their value very well. Residuals and interest rates used by
each lender may be static but most dealers have access to many
different companies providing leasing which will have varied
options.
Look up the current residual rates online or in a publication
such as the "Automotive Lease Guide". The dealer's residual
number should be higher than what is shown in the book, if not
then it isn't a factory subsidized deal and therefore you should
stay away from it. Also, do the same with the APR. You can
calculate the APR by multiplying the money factor in the lease
by 24. With this, you are looking for the lowest APR possible.
You also want to be sure that the lease is a closed lease with a
maximum term of three years. This should keep you in the factory
warranty so that you don't get stuck with repairs on a car that
isn't really yours.
So, what would be considered a good lease deal? For starters,
you want a lease with no down payment required, a minimum of
15,000 miles per year allowed, and a monthly payment that is
substantially lower than a 5 year loan would be. When you are
evaluating lease deals on different vehicles always use a "zero
down" approach to comparing them and remember that vehicles with
higher resell values will be better to lease.
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