Have you ever thought you negotiated an amazing deal on a car lease? You managed to get the dealer to lower the retail price? Unfortunately, this doesn’t necessarily make it a good deal, as the dealer may have added several raised financing fees.
Follow these five easy steps, and you’ll be putting yourself in the driver’s seat when negotiations start.
Research. Research. Research. It’s important to do as much research as possible into the vehicle you plan on purchasing. Start by determining what the going rate of the vehicle you’re interested is in your area by visiting a consumer auto site. This will provide you with a great base for negotiations. Also, it’s in your best interest to figure out what area dealers are charging by using the “build” function via the manufactures website. Keep an eye out for any manufacturers’ rebates or discounts, costing the dealer nothing, but often hidden within the website. You are now on your way to finding NYC’s best auto lease deals. Only a few more steps to go.
Negotiate. First off, get to know the auto lease vernacular and lingo down so that the dealer will take you seriously. Visit the dealership and negotiate to decrease the sale price. Staring with discounts offered by the manufacturer, next ask the dealer for a specific discount – as in, tell the dealer you would like to pay x-amount less on the price. More often than not the dealer will be willing to work with this, as opposed to asking the dealer what he/she can do for you. Either way, the dealer anticipates making something off of you, and is fairly keen to drop the price substantially in order to get his payout.
Learn about the money factor, also known as the buy rate. The money factor establishes the interest rate, a portion of your lease rate and a significant percentage of your month to month payment. It’s used by dealers to calculate the annual percentage rate (APR).
Because not many people are aware of the money factor, dealers take advantage by increasing the interest. This allows them to reduce the sale price substantially, making it look like you are getting a great deal.
Best way to find out what the money factor is? Ask your dealer. Once you have determined the dealer’s number (shown as ‘MF’ on lease documents) simply multiply it by 2,400 – an industry constant – to reveal the APR.
Now is also the time to learn all about zero down leasing options. If you have zero money to put down upfront or you need your money for something else, now is the time to check your eligibility and do your homework.
Having knowledge of the money factor in your back pocket gives you an edge twofold; firstly by communicating you know that this is a way dealer mark up financing has a valuable intimidation factor. Secondly, if you ask that the lease is given to you at the buy rate, and the dealer refuses you simply let them know you were offered the deal by another dealer.
If the dealer you are working with is not willing to work with you, find another one. You can often find valuable insight as to which dealers in your area are easy to work with by searching the web – chat sites, forums, and web postings of people discussing deals in your area.
Make sure you understand any and all additional charges such as destination charges, acquisition fees, tax, title and surrender fees. Keep in mind, these charges are somewhat flexible. You should also confirm that all the optional equipment is explicitly stated in the lease, like tires – often times cars are delivered with low-quality tires compared to those test-drive models.
By becoming an informed consumer, you undeniably obtain the upper hand in a deal – dealers will be weary to pull the wool over your eyes. Knowledge is power, and understanding the numbers levels the playing field when negotiating a deal, ultimately saving you hundreds monthly.