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How to Negotiate the Best Car Lease & Avoid Being a Victim

Tom Stride 2017-01-01 21:00:00

Leasing can be the most affordable method of obtaining a brand new car every few years.

For many motorists across the Great White North, leasing an automobile is often the preferred alternative to outright purchasing or financing. Whether it is the motorist's poor financial state or their desire to change their vehicle every few years or so, leasing is a popular choice for many.

Despite the numerous benefits behind leasing the car of your dreams, you could face a wide array of pitfalls if you are not careful enough, which could produce much regret each time you park your sedan, fill up the SUV with gasoline or simply swapping one lane for another in your sports car. In other words, you need to employ simple but effective negotiating measures.

Indeed, even the most seasoned of lessees may fall victim to the bells and whistles of leasing advertisements and avoid combing through the fine print. Although you may be equipped with more negotiating power when you opt for leasing, you still need a degree of auto and financial acumen to handle the helpful but pugnacious dealership throughout the process.

Before you go to a car dealership like Formula Honda, here are four tips to negotiate the best car lease and avoid becoming a victim:

Have Clear Goals in Mind

Prior to stepping inside the halls of your local car dealership and engaging in tough talk with the professionals waiting for your business, you must have a set of clear goals in mind. If you are unsure what you should be aiming for as you initiate the proceedings with the salesmen, here are a few tips:

  • Attempt to achieve at least two things: pay $0 down, receive $0 dealer fees, have $0 security deposit and dole out $0 bank fees.
  • Receive the highest residual value as possible if you're not buying the car at the end.
  • Get the lowest capitalized value as possible.
  • Work your way through the dealings to get as low a money factor as you can get.

Aside from actually nabbing a pair of keys, these should be your ultimate objectives.

Maintain a Grasp of Leasing Terminology

Entering the automobile arena without a rudimentary grasp of leasing terminology will inevitably lead to defeat. In order to garner the best terms and conditions as possible, you need to have an elementary understanding of the most basic leasing terminology.

Here is a brief crash course on what you should know ahead of time:

  • Cap Cost: this is another term for the automobile's price if you bought it outright.
  • Cap Cost Reduction: this is anything that can lower the cap cost, like a trade-in or rebate.
  • Money Factor: this is the lease's interest rate.
  • Residual Value: this is what the vehicle will be worth at the end of its lease.
  • Buy-Out Price: this is what the lessee will pay if they decide to keep the car at the end of the lease.

These are the primary terms that you should remember before walking inside the dealership.

Understand What You Can & Can't Negotiate

It would be nice if we could negotiate every aspect of every transaction we make in our day-to-day lives. Ditto for leasing a brand new car. Unfortunately, there are aspects that you can and can't negotiate as you sit down, sip on a cup coffee and discuss with the salesman.

Here are five things you can negotiate from the beginning:

  • Cap cost
  • Money factor
  • Excess mileage charges
  • Buy-out price
  • Cap cost reduction

Here are two elements that you cannot negotiate at the start:

  • Residual value
  • Acquisition fee (the cost of establishing the lease)

If you are prepared to enter into a fierce, sweat-inducing negotiation then be aware of what you can and can't negotiate.

Always Pay Attention to the Fine Print

One of the more frustrating parts of leasing a vehicle is all of the paperwork that you must sift through, peruse in detail and sign. What can be even more irksome is the amount of fine print that is found on the documents themselves. If you don't understand the fine print then you must ask plenty of questions and demand perfectly concise and clear responses.

Leasing a car is an appropriate tool for households that want a brand new car but want to refrain from breaking the bank and leaving their wallets slightly lighter. What makes leasing alluring is the fact that you can negotiate far better than you would if you were acquiring a vehicle. As long as you have the auto aptitude, the self-control, the resistance and the willpower, you'll be able to receive the best terms and conditions for your lease when you drive away from the dealer lot.

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