lease negotiation help
11-18-2014, 02:07 AM
#76
Rennlist Member
Actually, one of the best reasons for dealers to lease cars is that they know it's likely coming right back to them in 2-3 years. And dealers make the bulk of their profits on preowned sales, not new car sales.
New car sales serve to add more preowned cars into the market in the (near) future, and to maintain relationships with clients.
New car sales serve to add more preowned cars into the market in the (near) future, and to maintain relationships with clients.
11-18-2014, 08:17 AM
#77
Drifting
So when everyone says no down payment on a lease does that mean don't pay drive offs? I agree don't put any down payment on a lease aka cap reduction but what about drive off fees?
For those that don't know Drive off payment means: first month payment, license and registration.
For those that don't know Drive off payment means: first month payment, license and registration.
a) you are getting a subsidized interest rate, so take advantage of it
b) you have gap protection. So if the car is destroyed in an accident, flooded or stolen, you aren't upside down as you would likely be with conventional financing. In this case, you simply walk away from the lease (and presumably lease another one). Any money down, for any reason, is lost. Example:
- you lease $100K car, put zero down, and next month it is stolen. You made one payment ($1250), so you're out $1250.
- you lease $100K car, put $10K down, and next month it is stolen. You made one payment ($980) and so now you're out $10,980. The gap protection takes car of paying off the lease, but you don't get back anything "down".
Different math but similar situation if you lease a new Porsche and before the lease is up, you take advantage of their "pull ahead" program. Any down payment that you made is not refunded, so although you're not really losing directly, you also are not getting as much benefit from this program as you would have if you hadn't put down all that money.
I have done no money out of pocket leases with BMW and other marques that subsidize the interest rates better than Porsche does. It's kind of fun to walk in, sign a piece of paper saying "I promise to pay you later" and drive out in a new car.
As for the other question: I have tried to negotiate my fees and rates, and results vary. Usually - especially when rates are subsidized - there isn't anything that they can do, although some dealers mark-up the fees, so they can presumably discount those.
11-18-2014, 10:56 AM
#78
Rennlist Member
I think that dealers love to lease cars for a variety of reasons, but I expect that the primary reason is the arcane language in leasing contracts. There are acquisition fees, purchase option fees, disposition fees, fees for cars returned in less than pristine condition, etc. A friend of mine even had to pay $25 for a "tire fee" when he returned his Infiniti. I suspect that dealers believe that if they keep the fees low, no one will object. So there are lots of ways dealers can bury hidden charges in a lease.
There are undoubtedly a lot of experienced lease experts on this forum that negotiate great leasing deals. In my case I always pay cash and conduct 100% of my negotiation via email. I custom order my car and agree to pay X dollars over the invoice price which the dealer confirms via email. The only other fees are a documentation fee and tags and taxes. So I know down to the dollar the total amount I will pay for my car before I travel to the dealership to order the car and give them my deposit. Just wondering if any lease deals are negotiated in that manner or are the dreaded face to face haggling still an integral part of the leasing process.
There are undoubtedly a lot of experienced lease experts on this forum that negotiate great leasing deals. In my case I always pay cash and conduct 100% of my negotiation via email. I custom order my car and agree to pay X dollars over the invoice price which the dealer confirms via email. The only other fees are a documentation fee and tags and taxes. So I know down to the dollar the total amount I will pay for my car before I travel to the dealership to order the car and give them my deposit. Just wondering if any lease deals are negotiated in that manner or are the dreaded face to face haggling still an integral part of the leasing process.
