GO REVIEWS HOME
BLOG
 
CAR INDEX
 
Hybrid & Green Cars
Hybrid Cars Guide
Best Green Cars 2007
Hybrid Comparison
 
Buying A New Car
Buy A Car Strategy
How to Buy A Car
New Car Quote
 
Buying A Used Car
Avoiding Scams
Buy A Car Online
Buy A Used Car After Bankruptcy
Buy Cheap Used Car
Buying A Cheap Used Car
Car Auctions
Car Purchase Price Calculator
Cars For Sale By Owner
Cheap Used Cars For Sale
How To Buy A Used Car
Japanese Used Cars
Tips to Buy A Used Car
 
Auto Warranties
Best Car Warranty
Extended Auto Warranty
Understanding Auto Warranties
 
Auto Loans
Auto Loan Calculator
Auto Loan Rates
Auto Financing Options
Bad Credit Car Loans
Best Car Finance Deal
Buying A Car With Bad Credit
Instant Unsecured Car Loans - UK
Low Auto Interest Rate Tips
UK Instant Auto Loans
Used Car Loans
Logbook Loans
 
Selling A Car
Selling A Car On Ebay
Selling A Car Online
Ways To Sell A Preowned Car
 
Auto Parts
Auto Parts Online
Cheap Used Auto Parts
Understanding Parts Of Car
Used Car Parts
 
Car Accessories
Britax Car Seats
Car Audio MP3
Car Entertainment Systems
Car Seat Covers
Car Stereos
Child Car Booster Seats
Choosing A Personal Plate
Satellite Car Radio
 
Car Care & Servicing
Auto Servicing Lights
Biodiesel
Car Neon LED Interior Lights Install
Car Stereo Installation
Changing Car Oil
Defensive Driving
Restoring Classic Cars
SUV Customisation
 
Other Car
Auto Detailing
Auto Art
Automotive Credit Cards
Car Donations
Motor Sports Online
 
Car Reviews
Best Sports Car
Chrysler Jeep Wrangler
Dodge Charger
Hybrid Cars
Lexus ES 350
Nissan
Honda Luxury
Midsize Sedans
Suzuki SX4
Car Safety Ratings
Car Reviews Online
Car Search Online
Cool Cars
Flying Cars
Muscle Cars
Naza Automotive
Pick Up Trucks
 
Related Car Sections
Car Electronics
Car Insurance
 
Auto Rental, Hire, Lease
Auto Hire Florida
Best Rental Car Deal
Car Rental Basics
Car Rental Cape Town
Car Rental Florida
Cheap Car Rental
Coupons For Rental Cars
Discount Car Rental
Economy Car Rental
International Car Rental
Las Vegas Car Rental
Lease A Car
Leasing Company Cars
Luxury Car Rental
Save Money Car Rentals
Take Over Car Lease
 
Auto Transport
Auto Transport Companies
Car Shipping Quote
Cheap Auto Transport
International Auto Transport
 
Other Car Resources
Car Links
 
RESOURCES
Product Recalls
Links

How to Successfully Negotiate the Terms of Your Car Lease

By: Joan Yankowitz

Did you know that you can negotiate the value of the vehicle, capitalized cost reduction, length of the lease, mileage allowance, and options and equipment when you re leasing a car? Here s all you need to know to get a great deal.

The agreed-upon value of the vehicle just as you can negotiate the price of a vehicle when you buy it, you can negotiate the value of a vehicle when you lease it. The agreed-upon value of the vehicle is the primary component of the gross capitalized cost, so the lower this value is, the lower your monthly payments will be.

Manufacturers, dealerships, or lessors sometimes offer special incentives that reduce the agreed-upon value of the vehicle. If this is the case, you may not have much room to negotiate.

In any price negotiation, it helps to know the lessor's cost for the vehicle. You can get dealership cost information from a variety of sources on the Internet and from publications that are available in most public libraries. Use this information to help you negotiate the agreed-upon value of the vehicle.

The capitalized cost reduction (cap cost reduction) the capitalized cost reduction for a lease is like a down payment when buying a car. The more you pay to reduce the capitalized cost, the lower your monthly payments will be. The trade-off is that you have to pay the cap cost reduction up front, and you may not have the lump sum amount or you may want to do other things with that money.

Ask how different cap cost reductions will affect your monthly payment (for example, if you pay $1,000 instead of $3,500, what would your payments be?).
Most lessors restrict the maximum cap cost reduction you may make. For example, the maximum may be 20% of the MSRP or 20% of the value of the vehicle.

As an alternative to paying a higher cap cost reduction, you might be able to reduce your rent charge, and thereby lower your overall costs, by paying a higher security deposit

You may also want to consider a single-payment lease as an alternative to paying a higher cap cost reduction, if it will reduce your costs.
Some lease offers are based on a specific cap cost reduction. If you see a lease offer that is appealing to you, be sure to check the cap cost reduction and ask how the other lease terms and conditions would change if you paid more or less up front.

The length of the lease most leases are for 24, 36, 48 or 60 months (2-5 years). However, you may negotiate a lease for just about any period in between. Keep in mind, though, that not all lessors offer all terms for example, some offer only 24- or 36-month leases. Occasionally you may find leases with terms shorter than 24 months or longer than 60 months.

Sometimes you may find a lease for a period other than a full year--for example, 39 months instead of 36 months. Such a lease may be a special offer. For example, the lessors may use the same residual value for the longer term as for the shorter term, thereby spreading the depreciation over more months and reducing the monthly payments.

When evaluating such a lease offer, be sure to compare all the other lease terms in addition to monthly payments. Unless the lessor is making a special offer, such as in the example, negotiating a different term for your lease will change the residual value in the monthly payment calculation.

The longer the term of your lease, the lower the residual value will be (because the vehicle will be older when you return it). Thus, you will pay more in total depreciation with a longer-term lease.

Try to match the length of the lease to your needs and preferences. Negotiating a longer lease will generally lead to a lower monthly payment, but deciding to end a longer lease early could be costly. In a closed-end lease, the opportunity to avoid unexpected depreciation and walk away occurs only when you have completed the full term of the lease and paid any amounts owed.

The mileage allowance common annual mileage allowances in leases are 10,000 miles, 12,000 miles, or 15,000 miles, but you can negotiate other limits. Many lessees drive more than 14,000 miles a year. Try to match the miles you will be driving to the mileage allowance in the lease.

If you think you're going to be driving more miles than the lease allows, it's generally better to negotiate a higher mileage allowance in the lease than to pay for the extra miles at the end of the lease. On the other hand, if you think you'll be driving fewer miles, you may be able to save money by choosing a lower-mileage-allowance lease.

A lower-mileage lease will generally specify a higher residual value for the vehicle because a vehicle with fewer miles is worth more and is expected to have less wear. This higher residual value means that you will pay less for depreciation and your monthly payments will be lower. In contrast, a higher-mileage lease will generally specify a lower residual value for the vehicle because a vehicle with more miles on it when it's turned in is worth less than a lower-mileage vehicle.

Therefore, you'll pay more for depreciation during the term of the lease. And if you don't use those miles, you may not be entitled to a refund at the end of the lease. If the lessor has a refund policy, it should be stated in the lease.

Dealership- and consumer-installed options and equipment just as when you buy a car, you can choose the features you want and add accessories to a leased vehicle. You may want to upgrade the sound system, install a leather interior, or add a sunroof to the vehicle.

It may be preferable to have those items included in the lease rather than added after you lease the vehicle because if the lessor considers the equipment, for resale purposes, as adding value, the equipment will increase the residual value of the vehicle.

You would then pay only for the expected amount of depreciation of the equipment during the lease, not for the full cost of the equipment. However, lessors often have different policies for determining what is value-adding equipment.

Adding an extra feature may increase your personal enjoyment of the vehicle, but it may not appreciably increase the vehicle's resale value at lease-end. Ask the lessor about its policy on any equipment you want to add.

Also, in some cases, lessors will not let you add something if removing it may damage the vehicle or reduce its value. For example, you may not be able to add a trailer hitch, a luggage rack, or a mount for a car phone unless you are willing to leave it on the vehicle.

Be prepared to negotiate the price for any of these features and accessories. It helps to know the lessor's costs for these accessories and features.

You can get dealership cost information from a variety of sources on the Internet and from publications that are available in most public libraries. Use this information to help you negotiate.

You may also be asked if you want to sign up for a service or maintenance contract or for rust-proofing, fabric protection, undercoating, and so forth. These services are optional, and their prices can be negotiated.

You ll need excellent negotiating skills when you lease a car. By using the above tips, you ll soon be leasing your vehicle at very favorable terms.

Joan Yankowitz publishes the popular consumer and business Kwik eGuides at www.kwikeguides.com. Instantly download How to Buy a Car Without Getting Scammed Kwik eGuide at www.kwikeguides.com/car_scam.htm

 

Car Auctions

Car Resources And Products

Lemon Law Support - get remedy for that new car that just keeps giving your problems

Car Insurance Reviews

Find Car Manuals And Car Guides

Find Car Parts And Accessories

ChromeBolt.com - largest selection of brilliant chrome bolts and fasteners for custom motorcycles, cars, and boats

 

 
Bookmark and Share

GET LATEST PRODUCT REVIEWS
AND BUYING GUIDES BY EMAIL

Email:
Name: