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It’s hard to know what parts of the deal you can negotiate, understand all of the terminologies, and knowing what your monthly payment should be.
Leasing is increasingly growing in popularity and is just another way to finance a car. About one out of every three cars that leave the dealership are leased. If you want to lease your next car, follow our seven steps to get the best possible deal.
In car leasing, you are paying for depreciation, interest, tax, and some fees. So choosing a car that holds its value better (depreciates less), means your monthly lease payments will be lower. Speaking in leasing terms, a vehicle with a good resale value has a strong residual value.
Residual value is the amount the value that’s left when your lease ends, the more the better. This year, Kelley Blue Books’ best resale value award went to Toyota lease specials for their Toyota Tacoma.
When certain car models aren't’ selling well, the manufacturer could promote special leasing offers to move the inventory. These deals provide a lower monthly payment by changing the leasing formula. Check out Toyota lease specials to find deals on cars that hold their value.
Before going to the dealership, price that car you want using Edmunds.com or Kelley Blue Book. This way you will know the fair market value of the vehicle and its invoice price. The invoice price is about what the dealer paid for it and signifies the lowest price you will probably find.
Now that you know the target sales price, get in touch with a few dealers and request some quotes. You can see if they have the car you want in stock by emailing them and requesting their best sales price. It’s also very important that you don’t mention your intention to lease, simply request the sales price.
Even when you request quotes from different dealers for the same car, it could be difficult to compare them. That’s because the cars may be the same make and model, but come with different options. The best way to spot a good deal is to see how much the dealer is wanting over the invoice price. Even though the cars with different options may have different values, the relationship to the invoice reveals the best deals.
Once you choose the car with the best sales price, options, and color you want, contact the salesperson who gave you the quote. Tell them you wish to lease the car and request lease payments based on the quoted sales price. Find out the interest rate the lease is based on. The interest rate for leases is called the lease factor. You can use a lease calculator to see how the monthly payment will change based on the sale price, lease factor, and other fees.
If the monthly payments fit your budget then you are almost ready to close the deal. See if the dealership is willing to deliver the car to you instead of you picking it up. This is a good way to avoid wasting time at a dealership and getting upsells in the insurance and finance office. Although dealers prefer not to deliver the car, many do it when requested.
Once your car arrives, review the contract and make sure everything is what agreed upon. Verify that the lease contract has GAP insurance. If everything looks good, sign the papers, hand over your check to the dealer for the drive-off fees, and make sure your car is insured. Now enjoy your newly leased car!