What's The Best Way To Negotiate A Lease On A Vehicle?
 

I'm just about to lease a brand new 2006 Honda Ridgeline for my property management business, however the lease payment is higher than what I would like to pay per month. Is there a way to negotiate a lower monthly payment via bumping up the residual buyout at the end of the lease?

What is the best way to lower the lease payment, is there something else I am forgetting here? The lease rate is a bit higher than I would like (5.9%) but it's better than 9% which it was 3 months ago when the truck was just introduced.

Any help would be appreciated, please keep in mind I am from Canada :)

DH

how about paying cash in full?

i'd suggest hirring a hot girl to work the "cute girl discount" :P

armed.


..

tell them you will give them free access to porn

Ummm no, not the best use for my money. Leasing is the way to go for me.

DH

You gotta somehow get leverage or introduce some bargaining chips to the table. I don't know much about this car to be honest, but it sounds like its a new model (as in first year of introduction). These are the worst since they're usually sold out or pre-ordered in advance so you don't have much to bargain with. Either way, try offering a higher down payment, offering some sort of security to ensure the lease will not default, a higher buyout value at the end, etc. etc.

I'm guessing that your using your property management company as the leasee, maybe try using GTS' sales to secure the loan in addition to lower the risk of defaulting. If they won't recognize those sales, try securing a bank loan instead and they might recognize this fact instead. Basically, try to introduce as many bargaining chips as possible but like I said, a brand new model car is not that easy to sway them down on but it is possible, just make them feel very comfortable that you'll never default on your payments.
WG

I realize your POV on that, it's true enough. However, in the long term, the discount with full cash payment is best. Unless you can get 0% financing.

If you go and pay cash for a vehicle the government will be knocking on your door within days for an audit.

Hmm, I must have missed a few audits then. :helpme Should I be expecting them? Do you wear a tinfoil hat to bed?

That interest rate seems high, DH....is that because you're in Canada? Or are there problems with credit history?

I just leased a new car and the rate I got was 2.3%, which is not the best, but it's not bad.....I negotiated the payment by putting a slightly larger down payment for the front end and I extended the lease by six months; so, instead of the usual 36 months, I leased for 42.

Consider yourself lucky. I am speaking from experience.

I don't know about that ... but my wife went to the bank the other day and tried to deposit $23k in cash ..(without consulting me) she said she didn't want that much cash in the house ... good thing i know the girl at the counter and she told her to break it up into 3 deposits over a few weeks .. anything over $10k they have to report ... :Oh crap

I pay my taxes every year but i still don't need to go through an audit ..

I'm about to pick up a truck ..so i'll be watching this thread ... :thumbsup

Tell 'em you want 2 ;)

you never get buying power with a lease. they win either way.
they want you to take the lease. they make more. even if you cant pay it they win.
cash is not king in certain circumstances.

Duke

I was offered 1.9% adn I have the worst credit on earth from all my college expenses...
I put a year of college on my cc and forgot where the bill was supposed to be sent to :)

I think it's a canadian thing. I noticed living up there taht they get more out of you guys becuase there's less competition. When I went to the dealership near work I can see 12 more down teh road, they all compete for my money so they don't fuck around with percentage points.

I ended up buying because I was offered a 10 year 100k guaruntee and 3.9 % so I can improve my credit and my car's goign to work guarunteed for 10 years. Cna' tbeat that.

Hey DH, let me fill you in, I was in the car business for quite awhile before I got into this.

You can't really negotiate the money factor (9%) which is what the "interest" on a lease is called.
Also, the residual value is predetermined and you can't really negotiate that either.

You can however still negotiate the price of the car itself. Then once you secure a decent discount on the vehicle use that sales price number to figure out the lease payments.
The good thing is if you get them to reduce the price of the vehicle by say $1000 that will make a much bigger difference in your payment because that $1000 is only over 2-3 years on the lease as opposed to 5-6 years on a purchase.

If it's a new model that has a waiting list you're not going to be able to get a discount though. Supply and demand and all of that.

When I leased my BMW I prepaid the whole lease upfront and got a discount on the money factor that way, but other than that there wasn't much discount to be had on a very popular model.

First of all you need to shop the lease around.
I recommend you use Autoflex, they are the biggest and have over 50 lease options for every car.

You can also make a deal on the car to buy from a dealer. Get a low price in writing, then have the lease company purchase the car for that price and you lease it out.

You should be getting a descent deal on the Honda because it has a high residual. Try adjusting the length of the term or the reducing mileage.

Mainly though, I suggest you shop the lease, don't ever lease from a dealership, you will always lose in the end.

Without a doubt, this is a good one.

:thumbsup :pimp

Unless you plan on keeping that car for 5 or more years, it makes no sense to pay cash. Cars do not appreciate in value.
People say they won't lease because they don't own the car.
Well stop making payments and see who really owns your car.

99% of the cars on the road have payments attached, why not pay half as much than the guy wanting to own with a lease?

Plus you can always buyout the lease if you really need to keep it forever.

First you need to choose a dealer... the right dealer for this particular method is he who lets the driver take the vehicle for a spin without a sales rep. Some dealers in suburban towns allow this regularly.

Once you find the dealer you are most comfortable with, you then choose the vehicle. The best vehicle to use is a standard option vehicle with none of those fancy chips in the keys (later in life you will be stuck with a car that won't start and you will have lost the "flat key"). Once you find the vehicle of your choice, take your test drive.

Their are some important things you must look out for during a test drive... in this case the most important thing you will need is a small hardware store ran by some old senile couple, careful they may refer to you as being "sonny" or "dear" which is common among this particular species of old couples.

Once you have your new cars key duplicated the couple will most likely forget who you are which is a very helpful step when choosing a new car to lease.
Return to the dealership and tell them how you are not interested in the vehicle because the price is just not in your budgets "window", but that you will keep in touch.

Now it is very important to choose the time you return to make the initial deal and drive home in your new ride. Probably after 1am or anytime after 11pm. This is usually a good time to drive off the lot because you are going to want to speed off from excitement of driving your brand new pimp ride.

Once you return home you will find that I just saved you a bunch of money on your lease negotiations.

There are corporate tax benefits to leasing. That's about the only reason to lease....other than that, you pay through the nose. We got them to increase the amount on our trade in and take some money off the retail price of the car. But, there isn't a whole lot of room to haggle with a new car.

How do you figure that?
The current lease on the car I have is $410 a month for 36 months.
Im not going to want it after 3 years.

If I was purchasing the car, the cost would have been $650 for 60 months.

The last time we went in to purchase a vehicle, they offered me a decent Interest rate but I immediately told them I could get a better rate thru my credit union. They naturally wanted me to finance thru them instead and busted their ass for the next hour to be able to come to me with a significantly better rate than my credit union would provide. This saved me thousands of dollars overall.

Not sure if you can apply something like this, but I hope it helped. :)

Depends on what you're buying really. You can get major discounts on some models. On others, like hybrids, you may end up paying a few K over sticker.
But there's still room for negotiation depending on what you buy.

:2 cents:

Nice thought, but in the "Real" world, that doesm't help much. :2 cents:

I agree with this logic.
Most people trade their cars every 2-3 years anyways, and in many cases they're "upside down" on the vehicle they're trading. (They owe more on it than it's worth)
So what do you really "OWN" after making payments for 3 years? NOTHING. You own some negative equity that has to be tacked on to your next loan.

The lease payment on the BMW is at least $200 per month less than what the payment would be had I bought the car and financed for 5 years.
At the end of the lease I can buy it, trade it in for a new one (if it's worth more than the residual value I can buy it for) or I can just turn in the keys and walk away.

You're right. It does depend on what you're buying. Nissan holds its value nicely. For me, they gave me an excellent trade in and knocked money off the car and threw in some extras...so I was happy. The leasing was more for a corporate tax break than any other reason. Besides, I'm tired of owning cars, paying them off and then having to throw money into them because they're at 'that point'.

I don't think I can wrap myself around hybrids yet. Not to change the subject or take away from it; but, they are ugly and I just don't think they're ready for prime time yet.

BMW is a great example as they don't hold resale value. Find them all the time less than 10 years old for under 5 grand.

huh?
BMW's, Mercedes, Lexus, Acura/Honda all have excellent retained value.

The only time a BMW takes a slight hit is when a new body style comes out but even then it's not alot. The E-39 5 series, lost a bit on the new restyling, but it's still a car in high demand in the used department.

1st rule is never pay MSRP or over unless it's a hard to get car that you must have.
Also don't put much if any money down. The whole idea with leasing is to keep out of pocket costs down and pay for what you drive. This way if you total car you don't get the 2000 bucks you dropped on it to lower your payment and only drove it for a 3 weeks.

Find a price you are comfortable with and keep those points above in mind. Every lease deal is unique. Good Luck.

In my particular case the lease was alot cheaper than it normally would have been, because BMW was running a special lease deal on the new 3 series when it first came out.
They were very aggressive with the residual value and the money factor so that made the lease payment alot lower.

Still though, in most cases if you're buying a higher end car and you're only planning to keep it for 3 years or so, the lease will give you a lower total cost of ownership for those 3 years.
This method probably won't work for a chevy cavalier or ford focus, but if you're buying something over 30K the lease usually works in your favor.

Things to remember when you lease a Ridgeline...


gas prices at all time HIGH = Honda wants to move these vehicles out!

Honda has a lease special running right now on Ridgelines.

The best thing to do is find out what they are selling the SUV for and negotiate the selling price. Lenny2 mentioned there isn't much you can do with the money factor but that is not necessarily true. The dealership can shop the lease rate with different banks. This is all based on US market!

Remember to put as little money down as possible and NEVER lease for more than 36 months.

There are lots of benefits to leasing. Tax deductions, Automatic Gap insurance. Lower down payments and monthly payments.

:thumbsup

The new Lexus hybrid SUV looks sweet. But the prices on it will be very high due to demand. Plus no real 4WD :(

Sure you can shop around different banks, but if they're running a special through Honda then no bank is going to give you the same money factor or residual value that you're getting on the special from Honda.

99% of the time the finance arm of the car manufacturer is going to give you more attractive terms (credit permitting) because they have a vested interest in selling the cars. The banks are only selling paper and could care less what kind of car you buy or if you buy one at all.

:2 cents:

hire someone like this to negotiate for you http://www.auto-brokers.com/index.php

here is another one - http://www.cartelligent.com/ - i am sure you can find a local one. Find the best deal you can get and tell them to beat it.

Hey Raven, credit history is fine. The reason the interest rate is so high on this vehicle is because it's brand new. If the truck was a year old they would be doing much better leasing rates and promos. The truck has been selling like hotcakes up here, our local dealership is already sold out of inventory. But they can get me another one from another dealership.

I don't want to put down any money if I don't have to. ;)

DH

Dunno - are you leasing for tax reasons? WHy lease? I'm not familiar with canadian tax law so I can't really give any advice here :(

honestly if you are looking to get it for a work truck as it seems from your post
dont get it

:/ you will regret it

Yep I can write off the entire lease for business, hence the reason leasing is a better option for me.

DH

It's being used for light duty work, nothing serious. I'll probably also use it to pull around my snowmobiles and my step-dad's boat.

DH

Didn't think there were credit problems, but I had to ask, if only for the comedic value, DH!

I put very little down on my lease....but, I didn't go for a high end car, as I really hate driving them off the lot, leaking depreciation all the way. LOL.

My Maxima 3.5 Elite does me just fine....:) And, the lease payment was lower than a buy payment. I like the new car smell, in spite of what I'm now reading is carcinogenic..so leasing is a great way for me....

Alot of power issues with the truck after a bit of use

:1orglaugh :1orglaugh

You seem to have your mind made up however i do not recommend going with the ridgeline; i have tremendous respect for hondas but what you should be getting as a truck is more like a chevy with the 6.7 turbodiesel. you can only negociate the initial price of the vehicle although im not sure how they will spread it within your payments. think about what ive said tho, GM drinks a lot but im guessing you are not looking for a truck in order to achieve fuel-economy. otherwise, i hope the Honda suits your needs!

a bigger down payment will get you lower monthly payments.. also putting a large refundable security deposit may lower monthly rates.. also increasing the lease term and lowering the milage allounce will lower your rates

just tell them ur thinking about getting whatever some other Japanese carmaker has for a similar car, that should get them :)

but I'd just go with the bigger balloon payment at the end, something outrageous, or try to enstill the idea that your company will need more cars in the future, etc etc.

Make sure you contact me. I am in Toronto and i used to work for Honda Canada,......I will make some calls and get you the best deal i can.

Thanks again for your help Brock :)

DH