Negotiating a Car Lease in Six Easy Steps

couple negotiating car lease at dealership

Meet Tom. He lives in Boston and rides the T to work. He can walk or ride his bike almost anywhere else he needs to go. He’s just been offered a great job opportunity — a two-year placement outside the city — and he’s going to need a car. Since it’s temporary, leasing a car makes the most financial sense. But Tom has never leased a car before so he’s a little unsure how to approach it.

No problem! We’ve got some great tips on how best to negotiate a lease, starting with figuring out what you can afford.

1. Begin by taking a good look at your budget to determine what you can afford to pay monthly. Don’t forget to include the cost of insurance. (Most insurance carriers can give you a basic list of cars and their approximate cost to insure.) Plan to spend no more than 20% of your take-home pay on all your car-related expenses.

2. Pick a couple of dealerships to visit and choose the model, color, and options you want on two or three cars in your price range. You can also check out inventory at local dealerships through AutoSMART. Be on the lookout for models with good safety features and low insurance premiums. Only consider cars you can take for a test drive. Don’t tell the salesperson you’re interested in leasing.

3. Get additional bargaining information by learning what others have paid. Consumer Reports has a Build & Buy Car Buying Service® that will give you an idea what others in your neighborhood were willing to spend for the makes and models you're considering. The report will also give you an idea how much room you have to negotiate.

4. Return to the dealership and negotiate the purchase price of the vehicle. The salesperson may try to negotiate the monthly payment you want, but stick to the total price of the car. Only after this negotiation is completed should you tell the dealer you’d like to lease the car. Your monthly payments will be based on the final price you agree to.

5. Ask the dealer to put all the costs and fees associated with leasing the car in writing so you can go over them to make sure they’re fair. Feel free to ask the dealer to explain what each fee covers. Take a close look at the figure for the Capitalized Cost Reduction. It should be zero if you aren’t putting any money down.

6. If you’re not happy or comfortable with the deal you’re being offered, WALK AWAY! In fact, plan to leave and return in a day or two; it may give you a little more bargaining power. Don’t be in a hurry to sign the contract, because you’re more likely to agree to a deal that, well, may not be ideal.

Following these steps should help you negotiate a good deal on a lease. Just remember to be patient, detail-oriented, and firm.

Once you’ve signed on the dotted line, be sure to make your payments on time, watch your mileage and, most of all, enjoy your new car!


When you're ready to buy or lease your next car, be sure to download Your Guide to Smart Auto Financing. This free Guide will give you additional tips on negotiating the best deal for your next car. And'll learn about our innovative Better Than A Lease program that offers you the best of buying and leasing. Download the eGuide here!

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Hanscom Federal Credit Union
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