You’ve just walked out of the dealership with the keys to your brand new leased car. That new car smell hits you and you can’t wait to show your friends your sweet new ride. But the euphoria starts to fade as soon as that first payment hits your bank account. Now you’re wondering if you could have done more to lower your monthly cost. Don’t stress! There are plenty of ways you can save money on your car lease if you know where to look.
In this blog post, we’re going to explore some easy tips and tricks to help you lower your monthly payments and keep more cash in your wallet. Whether it’s negotiating a better deal, understanding fees, or making simple changes to your driving habits, you’re going to be learning insider advice to start saving money on your car lease today.
Calculate the True Cost of Your Lease
First — think about what exactly your vehicle is going to cost:
Down Payment
The down payment refers to the upfront amount you pay to lower your monthly lease payments. The more you put down, the less you’re going to have to cover each month. Even a couple thousand dollars makes a difference. Compare different down payment options to know how much you can save over the duration of your lease.
Interest
The interest (similar to the money factor) the car leasing companies require you to pay determines a large portion of your monthly lease payment. Negotiate the lowest possible interest rate, which can save you significantly over time. Check your credit score and credit report to make sure there are no errors. A good score will qualify you for a lower rate. You can also shop around at different dealerships to compare their rates.
Additional Fees
A number of additional fees are often tacked onto car leases like acquisition fees, documentation fees, registration and licensing fees. Make sure you understand all the fees in the lease contract to avoid surprises. You could negotiate some fees, especially if they seem excessive. Your leasing company may be willing to waive or reduce some fees to close the lease deal.
Early Termination
If you want to get out of your lease early, it will likely cost you. Early termination fees are usually very high, so only sign a lease if you’re sure you want to keep the car for the full term. However, some lease deals do allow you to terminate the lease up to six months early without a penalty. Check if this option is available in case your needs change.
With some smart moves, you can save thousands of dollars on your car lease and drive the vehicle that fits your needs and budget. Do your homework and crunch the numbers carefully to get the best possible deal.
Negotiate The Selling Price
If you want to save money on your lease, the first place to start is negotiating the best possible purchase price for the vehicle. Dealers have flexibility in the prices they charge, so do some research on the make, model, options, and mileage to determine a fair price range.
Check Vehicle Value Guides
Check trusted vehicle value guides like Kelley Blue Book and NADA to find the typical price range for the specific vehicle you want. This will give you a good starting point for negotiations and help you avoid overpaying.
Compare prices at different dealers
Check prices for the exact same vehicle at different dealers in your area. Let each dealer know you’re shopping around and looking for the best overall deal. Make dealers compete for your business by negotiating and leveraging the lowest price from another dealer.
Choose a Realistic Length and Mileage
The most common lease terms are 24 to 36 months. A shorter lease typically has lower payments but higher residual value requirements. Make sure the term fits how long you really want to keep the vehicle. For mileage, be realistic about your driving needs. Going over the mileage limit can result in hefty fees when the lease ends. Negotiate the highest mileage limit possible to give yourself breathing room.
Be willing to walk away
The most important part of negotiating is being willing to walk away from a deal that’s not in your favor. Don’t feel pressured into accepting an offer that’s not ideal. Politely tell the dealer the price needs to be lower for you to consider the lease, and start heading for the exit. There’s a good chance the dealer will make you another offer to avoid losing the sale altogether.
With some patience and the right techniques, you can negotiate a great selling price for your leased vehicle. Saving money upfront will mean a lower monthly payment and overall savings during your lease term. Stay firm in your price range, get multiple different bids, and don’t be afraid to walk away if needed. At the end of the day, you’re going to be driving off in your new ride with money left in your pocket.
Take Advantage of Lease Incentives and Rebates
Car manufacturers and dealerships often offer incentives and rebates to make leasing more appealing. These money-saving offers could take hundreds or even thousands off the total cost of your lease.
Do Research
Check the manufacturer’s website to see what national offers they’re promoting. Then visit your local dealership sites to see what other rebates they may be advertising. The offers will likely change from month to month, so keep checking back to find the best deal.
Loyalty And Conquest Offers
If you’re already leasing or financing a vehicle with the same brand, you may qualify for a loyalty offer for your next lease. Conquest offers target customers switching from a competitor’s brand. These can save you $500 or more off the total lease cost.
Buyout Clause
A lease buyout clause gives you the option to purchase the vehicle at the end of the lease term, often at the vehicle’s residual value. Negotiate the lowest possible buyout price to get the most equity in the vehicle. That way if you wish to buy it, you’re going to have instant equity, or if you sell it, you could profit from the difference between the buyout price and current market value. The buyout price is an important factor in determining if leasing is the right choice.
Lease Pull-Ahead Programs
Some brands offer programs where they allow you to end your current lease early in exchange for leasing another new vehicle from them. You’ll avoid any early termination fees and may qualify for additional savings on the new lease. Check if the brand you want allows for lease pull-ahead and if you have enough equity left in your current lease to take advantage of the program.
Taking the time to explore all the ways to save money on a lease pays off. With some smart negotiating and the right incentives or rebates, you can drive off the lot with a brand new leased vehicle while keeping hundreds of dollars in your pocket each month.
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