Preparing to Lease
Preparing yourself for leasing is an important factor to leasing a car successfully. Taking the time to do the research can help to save you a lot of money in the end. Remember you are going to be negotiating with someone who is selling cars as a living; you have to be ready to bargain with them.
Choosing the right car can make a difference in your monthly payments. Before you do to the dealer to lease a car you should know exactly the type of car you want. Clear everything you possibly can about the car, from the different features it has to the optional equipment. Get as much knowledge about the car as you possibly can, try to know as much about the car as a salesperson would know.
The best cars to lease are cars with high resale values. These cars are typically ones that don’t change very much in style every year. Be careful for any safety problems or large numbers of recalls on the car. Knowing about the mark conditions is a plus. Such as how it has been selling, or what the supply is.
Every price is negotiable; you do not pay the full sticker price. That is, unless the car is a hot seller and supply is in demand.
The key to knowing what to pay for a new car is to know the factory invoice price.
The factory invoice price is the price that the dealers pay for the car.
The range in which you can bargain the car price is the difference between the Manufacturer’s Suggested Retail Price (MSRP) and the factory invoice, which is the dealer’s profit margin.
The margin can be anywhere between 5% and 20% of the sticker price. If you are trying to get a 9% discount on a car that the dealer only makes 7% profit, you will not get the discount.
So what would be a fair profit for the dealer? Well, it would be hard to give exact numbers. What we can say is an average that would be fair on cars that are in good supply and average demand. For cars with a MSRP up to $20,000, giving the dealer $300 to $500 on top of the factory invoice price would be fair. For MSRP on cars up to $40,000, $500 o $1,000 over the factory invoice would be a good offer. For cars with a MSRP higher than $40,000, $2,000 to $3,000 over the factory invoice would be fair. Remember to expect to possibly pay more if the dealer decides to do hard bargaining.
Before you negotiate any price with the dealer research and find out if he dealer gets any incentive payments, and how much, from the manufacturer. The incentive payment is what the manufacturer gives to the dealer to sell their cars. This will let you know if the dealer is gets more than just profit from the cars they sell. If they do get incentive payments from the manufacturer, they will still be receiving money even if they sell the car to you at the factory invoice price.
Often many people do not like to negotiate with the dealers. Now in days the easiest way to see how low you can get the dealer’s prices without talking to a salesperson is through the internet. Using sites that give free online car pricing will give you an idea of how much of a discount you could get with specific cars. Go to each site and specify which car you’re interested in leasing, and they will give you the price quotes of that car from dealers in your area. Try to get quotes from multiple online services to compare the prices. Remember though, the prices you get might not be the absolute lowest you can get. If you like one of the prices you got, you have just saved yourself time on negotiation with the salesperson.
Edmunds.com, auto.yahoo.com, autos.msn.com, is a few web sites you could use to find different car prices.
It is important when leasing to know the car you want, what you can afford, and know how leasing works, before you go to a dealer. The key to leasing is knowing the car prices.