By Allan Halcrow | American Express Credit Intel Freelance Contributor
5 Min Read | November 06, 2019 in Life
You’ve weighed the pros and cons of leasing versus buying a car and concluded that leasing is definitely the best option for you—well, the right lease is the best option for you. Of course, wanting the right deal is no guarantee you can walk into a dealership and get it. But the odds of getting the right deal can be better if you plan ahead and go in prepared.
You and the dealer both want the best possible auto lease deal, but they’re likely not the same deal. The dealer knows his or her costs and what it will take for the deal to be profitable. Don’t you want to know your numbers, too? Experts suggest that you look at your overall budget to determine how much you can comfortably spend on a car. The editors of U.S. News & World Report’s automotive comparison site also suggest you allow for more than just the lease payment. Consider insurance (which will likely cost more if leasing rather than buying the car) and gas, too.1
The first step is to gather information, both about your situation and your options.
Although there are many differences between leasing a car and buying it, negotiating the price of the car (known in leasing lingo as the capitalized cost or “cap cost”) generally is not one of them. You may wish to haggle, because the better cap cost you get the less your lease will cost.
In fact, negotiating a car lease can sometimes start before you actually begin negotiating the car lease! Some experts suggest that you negotiate a purchase price before you reveal that you are considering leasing. Once you’ve worked out the purchase price, you may also be able to negotiate mileage limits and other terms of the lease. As always, shopping around can benefit your price bargaining—you’ll likely save money if dealers are competing for your business.
Knowing your monthly payment, or even the total cost of the lease, is not the same as knowing the total of what you’re spending. That’s because leasing is a complicated transaction with several potential additional costs.
It’s a good idea to ask the dealer to disclose all fees before drawing up the contract.
Leasing agreements can be daunting to read and understand—long, complex, and often full of legalese. Experts recommend taking your time to read the agreement and to be sure that you understand it—and if a dealer pressures you to sign anything before you’re ready you should be prepared to walk away. It’s not easy to get out of a lease once signed.
Learning the ins and outs of how to lease a car can help you get the best deal for the car you want. Experts say it’s important to do your research, ask questions and advocate for what you want. If you take those steps, you’ll likely negotiate a lease for the right car at terms that make financial sense. And you’ll reach your destination.
1 “How does leasing a car work?,” U.S. News & World Report
2 State of the Automotive Finance Market, Q1 2019, Experian
3 “Can you lease a car with bad credit?,” Experian
4 “Is Your Credit Score High Enough to Lease a Car?,” The Balance
5 “How does leasing a car work?,” U.S. News & World Report
7 “Buying vs Leasing a Car,” U.S. News & World Report