4 Easy Steps to Know if you got the Best Deal on Your Car Lease
In the current car climate
Do you feel like you got a good deal on your car lease? If you’re not sure, don’t worry! It’s totally normal to be a little uncertain. After all, leases can be pretty confusing. But don’t worry, we’re here to help.
In this post, we will discuss four ways to make sure you’re getting the best deal on your car lease. So whether you’re a strong negotiator or not, read on for tips that will help save you money!
The most important aspect of car leasing
How many times have you heard someone boast about low monthly payments? This is fool’s gold. What they really should be concerned about is lowering the final sale price. Just because a car has low monthly payments does not mean the overall cost is lowered. In fact, it’s often the opposite! To get an accurate estimate of the final cost, ask the salesperson for a breakdown of all fees, taxes, and other charges that will be added to the base price of the car.
Moreover, if you want to drive that sale price down make sure to get the Carfax, as it bases everything on the Kelley bluebook value and forces sellers to post a lot of info about the car.
Even if it might feel like one of the worst times in a long time to get a used car, it isn’t. It always feels this way… just to varying degrees.
Keep looking over all the major listing sites for stuff in your area and a reasonable deal will pop up.
How to negotiate the best deal (for bad negotiators)
When negotiating the final sales price on any car try not to worry about offending the salesperson. We here at Leasly love a lot of these people (because we were them, once upon a time!), but many of these guys and gals deserve Oscars for the performances they put on. Really nothing can offend a salesperson especially if you’re an informed buyer and you’ve prepared multiple quotes on other vehicles.
Dealerships do not want to recuperate non-appreciating assets. So these salespeople who nickel and dime you on tiny amounts are desperate.
(Oh God, I hope the salespeople I work with don’t fire me now)
Let me put something into perspective for you: 50% of Americans have less than $500 in their bank accounts. When most people sell something, they do it because they need cash now. You should not be overpaying for something; so, it’s on them to cater to you, not the other way around! Even if you had absolutely all the money in the world, paying anything close to the asking price is your own financial irresponsibility.
The Tl;dr of negotiating a car deal is you can always walk away. Never forget that. Get a tattoo of it if that helps you remember. When you tell a salesman you have multiple offers they’ll have no choice but to try and get you a deal.
Show me the money factor
The three most principal factors of leasing a car are: 1) the money factor, 2) residual value, and 3) adjusted cap cost. In plain English the money factor is basically the interest rate on your lease, so you want to make sure it is as low as possible.
Money factors are a little bit tricky to work with, but in general, you want to aim for a money factor of .0025 or lower. To calculate your monthly payment, multiply the money factor by two, then multiply it by the purchase price of the car. So if you’re looking at a $30,000 car with a money factor of .001, your monthly payment would be $60.
Usually your money factor is non-negotiable. Your credit score determines what tier you’re placed in — so the higher your credit score, the better your money factor is likely to be!
The other two important aspects to pay attention to are residual value, which is what the car is estimated to be worth at the end of the lease, and the adjusted cap cost, which is the negotiated price of the car plus any additional fees or charges.
To get a promising idea of what a fair residual value is, you can look up similar models on websites like Edmunds or Kelley Blue Book. As for the adjusted cap cost, remember that you’re not just looking at the purchase price of the car — you’re also considering things like taxes, fees, and charges.
Once you have considered all these factors, you should have a fairly good idea of whether you’re getting a good deal on your car lease! Just remember to do your research and shop around for the best.
Did you get a good deal?
Maybe! Let’s find out!
You will need the following information:
- The purchase price of the car
- The money factor
- The residual value
- The length of the lease (in months)
- Mileage per year
- The total amount you’re paying over the life of the lease (including taxes, fees, and charges)
Now that you have all that you’ll want to head over to Leasehackr.com to compare your information with other leased deals.
Here’s what a good deal looks like: Someone recently posted a titillating deal on a 2022 Nissan Leaf SV they scored for 18 months/10k per year. They were able to pay $2,800 at signing and $85 a month, and they even received $2100 lease cash from Nissan! My God… It’s getting steamy here.
And here’s a bad deal: Someone scouted out a 2020 Volvo XC 60 Momentum with a $1000 down payment and $626 monthly payments. The Volvo had an MSRP of $46,990 and even a $6,000 discount; however, where the buyer messed up was an over infatuation with low monthly payments. Monthly payments don’t mean much if the final price of the car isn’t negotiated down. Even in a “bad” car market you can often get lower than the MSRP.
Final thought
Leasing is a fantastic way to get a new car without having to pay an exorbitant amount of money upfront. However, it is important to do your research and make sure you’re getting a good deal on your lease.
By considering the purchase price, money factor, residual value, and adjusted cap cost, you can be sure you are getting the best deal possible! And if you are ever unsure, you can always head over to Leasly and ask the experts themselves! Happy leasing!
