You might read in some personal finance blogs the recommendation to stay away from signing a car lease. However, car leases work great for consumers who do not want the responsibility of paying for repairs and maintenance, as well as getting socked with the large first year of depreciation that comes with owning a new car. Speaking of a new car, by turning over a car lease every 36 months, you get behind the wheel of a new car every three years.
Some advocates of car leases promote the easier negotiation process. The fact remains that negotiating a car lease requires as much, if not more financial savvy and behavioral psychology skills than the strategies you have to use for getting a sweet price on a new car.
Without further ado, here are some tips to help you learn how to negotiate a car lease.
Without repair and maintenance costs, leasing a new car costs less per month than buying a new vehicle. Nonetheless, you still have to figure out how much you can afford, before you meet with a leasing agent or car dealership sales rep. You have to figure out how much you can afford for a down payment, although car leasing agreements typically require less money down to seal the deal. Discover how many miles the lease permits you to drive each month. After a surpassing the lease limit, you can expect excess mileage fees. Finally, calculate the maximum amount of money you send the leasing company or car dealer to pay the monthly leasing charge.
Do Your Homework
Research the different makes and models that appeal to you, and then whittle the list down to reach your ideal vehicle. Visit trusted sites such as Edmunds and Kelley Blue Book to research what leasing car dealerships and leasing companies charge for monthly vehicle lease payments. Doing your homework also involves calling multiple dealerships and leasing companies to receive quotes for your preferred make and model. Receiving quotes prevents sales reps from low balling your offer during a negotiation.
Timing is Everything
Did you know that when you schedule an appointment with a leasing agent or car dealer sales rep that the timing of your visits goes long way in determining the strength of your negotiating position. You know sales reps and leasing agents operate on quotas, which usually consist of monthly and quarterly sales targets. Therefore, the best time to negotiate a car lease is at the end of each month and each quarter. Ideally, you want to negotiate a car lease around March 31, June 30, September 30, and December 31. End of year incentives for sales reps and leasing agents make the week before December 31 the best time of year to sign a car lease in your financial favor.
Use a Smartphone to Make You Smart
One of the things that trips up consumers who negotiate auto leases is not the fear of the unknown, but the fear of not knowing. When you square off with a leasing company agent or dealership sales rep, you face dealing with a knowledgeable professional who will use what you do not know against you. Your ace in the hole is technology, as one click of a Smartphone connects you to facts you use to strengthen your bargaining position. For example, TrueCar.com provides auto leasing customers with real time prices other consumers have paid for a similar vehicle. Once you set your phone on the leasing agent’s desk, he or she will quickly realize you have just leveled the negotiating playing field.
At First, Do Not Mention Leasing a Car
Avoid focusing on what the sales rep or leasing agent insists as the monthly lease payment. Instead, treat negotiating a car lease the same way you treat negotiate buying a new car. After the two parties agree to a new car price, you have the advantage of breaking down the total price into monthly leasing payment Submit your well-researched value of the vehicle at the end of the lease. Then, you subtract the end of contract value from the new car price and divide the total by the number of months you plan to lease the vehicle.
Learn the tricks of the trade that often give sales reps and leasing agents the upper hand when it comes to negotiating a new car lease. One of classic tricks of the trade is the good cop, bad cop routine when the sales rep claims the finance manager is responsible for not budging on price. Adding hidden fees in the fine print of a leasing contract is another trick leasing agents and dealership sales reps use to scam customers.