How to Negotiate a Good Car Lease Deal

Some “experts” have suggested that you initially not inform a dealer how you plan to finance your car — that you should wait until a price has been established, then tell them that you want to lease.

Don’t do it! It’s old advice and it doesn’t work well anymore.

Up front, let the dealer salesperson know that you want to lease, that you consider yourself informed about leasing, that you want to discuss selling price, not just monthly payments, and that you are not interested in playing games.

Let the dealer know that if you can get a good fair deal, you’ll lease today. Otherwise, you’re willing to walk out and find another car and another dealer.

The three key advantages you have and should use in any car lease negotiation are:

  • Your time to prepare and educate yourself about the car, prices, and leasing
  • Your ability to shop around and find the best deal
  • Your ability to walk away if you don’t like a deal that’s offered to you

Prepare to Negotiate

If you’ve already done your homework, this process will be as smooth as silk. If you haven’t, the process could be long and painful, not to mention expensive.

First, you should negotiate the lease price (cap cost), having a specific target price in mind (see How Much Car Can I Afford). The lower the price, the lower your monthly lease payment. Don’t let them tell you that price isn’t negotiable in a lease. It’s an old trick. Unless you’re wanting a top-selling car that’s in short supply, price is always negotiable in a car lease.

One of the most useful things to know when negotiating car prices is to know what other people are paying for the same car you want. Otherwise, you likely won’t know what price you’re negotiating for, especially if there are hidden incentives available. You can easily get this information at, an invaluable resource for anyone buying or leasing a car.

Since a dealer only controls price, don’t expect to get very far trying to negotiate residuals and money factor, which are controlled by the dealer’s leasing company, for which the dealer is just acting as an agent. You can, however, ask if they work with other leasing finance companies who might offer better terms.

Next, you should ask about any rebates, advertised specials,  factory-to-dealer incentives, or discounts that would reduce your capitalized cost. Tell them what down payment, if any, you would like to make and negotiate a fair price for your trade-in (you should already know its wholesale value). Ask about any acquisition fees, disposition fees, or other charges that would affect your cost.

So You Got the Deal

Finally, ask the dealer to calculate your monthly payment amount, less sales tax, based on all the figures that have been agreed upon. While the salesperson is gone to check with the Finance and Insurance (F&I) Manager to calculate the numbers (salespeople don’t make these kinds of  calculations), do your own calculations. When he returns, it’s very important that you check their payment figure against your own.

Make sure you’re using exactly the same cap cost, down payment (cap cost reduction), residual value, money factor, and term (lease months) as the dealer is using, and that you’ve included any extra costs that you are not paying up-front in cash. If there is a discrepancy, have them explain their calculations in detail, step-by-step. Often, the difference is a “mistake” or a previously unmentioned extra charge, a “hidden” fee, or you weren’t given correct credit for your trade-in.

When No Negotiations Are Required

Now that you know the essentials of negotiating a lease deal, you should also know there are times when little or no negotiating is required.

When you find good lease deals being advertised in the newspaper, on TV, or on a car maker’s web site, these are special packaged deals jointly sponsored by the dealer and the car manufacturer.

These promotional offers are nearly always good deals and usually require no further negotiating. In fact, even if you wanted to, negotiating is usually not possible due to the special conditions required to accept the deal. Typically, every element of a deal — lease price, term, money factor, residual, vehicle make, model, and style — is already set and can’t be changed.

Most of these manufacturer “subvented” deals are better than you could negotiate yourself.

For a list of current special lease offers from car companies, see Best Car Deals.

What’s the catch with these special deals? The only catch is that the deals may only be available on certain specific models and styles — and for only a limited time. If you like the model/style, fine. If not, you’ll have to go back to getting your good deal the old fashion way — negotiate for it.

Car Lease Negotiating Tips

Following are some important tips that may help you in your car lease negotiations:

  • Always negotiate price, never monthly payments (unless you know how monthly lease payments are calculated)
  • Always negotiate UP from dealer’s cost, not DOWN from the sticker price
  • Never let the dealer tell you that lease prices are not negotiable
  • Avoid telling the dealer what monthly payments you can afford – give him a price instead (unless you know how to calculate payments from price)
  • Always come prepared knowing the dealer invoice price for the vehicle you want — use Edmunds
  • Always come knowing what your trade-in is worth — use or
  • Never let the dealer tell you your source of invoice prices or trade-in values is wrong. Yours aren’t wrong, just different than his
  • Never, ever give the dealer a deposit to “hold” a car. The car will still be there when you get back.
  • Never give the dealer a chance to “lose” the keys to your trade-in
  • Don’t sign a “purchase/lease agreement” until you’ve settled on a deal
  • Never reveal your attraction to a vehicle (“I just love that car”) during negotiations
  • If you’re not comfortable with the salesperson, ask for another, or leave
  • Always give yourself the option of walking out if negotiations don’t go your way
  • Let the dealer know up front that you are knowledgeable about leasing (assuming you really are)
  • If you sense the salesperson is playing games with you, ask them to stop or you’ll leave
  • Don’t agree to extended warranties, credit insurance, security devices, or other overpriced add-on services
  • Always check the dealer’s monthly lease payment figures against your own figures — use our Lease Calculator
  • Generally, it’s best to deal at the end of the day, at the end of the month, on a weekday, on a rainy day, or any slow period
  • Never negotiate when you are in a hurry, desperate, or have limited time to deal
  • Never accept an offer to take a car home overnight before you’ve settled a deal
  • If you have poor credit, never take a car home until your credit has been approved by the dealer’s finance company
  • If you become tired, confused, intimidated, or pressured during negotiations, come back another day
Your Most Powerful Negotiating Tool

The most valuable tool in negotiating a car lease or purchase is … your ability to get up and walk out the door of the dealership if you don’t like the deal being offered to you. If the dealer has a better deal that he hasn’t offered yet, he’ll come running after you. If not, you know with some certainty that the last offer was his best deal.  This is a very POWERFUL and incredibly EFFECTIVE negotiating tool. If you don’t use it, you are cheating yourself.


Negotiating a car lease is just as important as negotiating a purchase. The main factor that you can negotiate is price. Know your pricing information before you visit a dealer. If you can find advertised manufacturer-sponsored promotional lease deals, you don’t need to negotiate — if you like the vehicle being promoted.

Please read the next section, After the Deal.


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