I have been asked “what is the easiest way to negotiate a lease”, and honestly, the best lease programs (money-factor and residuals) are usually offered by the factory. Keep in mind, it will only work if the model you selected has a sub-vented lease program.

Does a lease fit my needs?

Before we get into the "sub-vented leases", "money-factors" and "residuals", the first step is to determine whether or not a lease will fit your driving habits. Ask yourself this question: "do I drive more than 15,000 miles a year?” If you do, then a lease is probably not a great option unless you have a tax benefit (some can write-off a percentage of their lease payment as a business expense.)

If you drive less than 15,000 miles a year and like the idea of getting a new car every three or four years then leasing is a good way to get a new car at a low monthly payment. Also, for many vehilces it may be more difficult to get approved on a lease than a traditional car loan. On a leased vehilce the lender has more exposure to loss.

Sub-Vented Lease Rates.

Once you have decided on the model of car you would like to lease, the next step is to look on-line to find advertised lease specials. These advertised specials are going to publish low payments and they are normally calculated using a high residual value and low money-factor. (You can read about money-factor and residuals here.)
Theses advertised leases are called sub-vented leases. Essentially a sub-vented lease is a program supported by the manufacturer allowing the car dealer to advertising a super-low monthly payment. A good way to find these specials is to go directly to the manufacturers website.

Keep in mind, the car you want to lease may not have a sub-vented program. If there isn't a sub-vented program please refer to our Lease Tools and Car Buying Guide to find the best solution.

If you found a lease program that works, you must read the fine print on the advertisement to find the "MSRP" and the "Gross Cap Cost". The "MSRP' is the Manufacturer Suggested Retail Price and the "Cap Cost" is the selling price. Not only do these advertised lease specials offer a good residual and money-factor; often they are calculated using a low cap cost (selling price).

The advertised MSRP and Cap Cost you can use to compare with the car that you select at the dealer. For example: the advertised lease may be on a car that has a MSRP of $30,500 with a cap-cost of $28,500 and you may have selected a car that has a MSRP of $31,500. This means that the Cap cost on the lease should be approximately $1000 higher ($29500).

Ask for the Money Factor.

Here is the tricky part, if you select a car that is not advertised many times the dealer is going to structure your payments using a higher money-factor and selling price. Keep in mind, even if the car you choose maybe more expensive than the one that was advertised, the payments should only increase a few dollars for every thousand dollars as the price increases. This is because the residual value will increase along with the price.

In order to maintain an “apples to apples” comparison you must ask the dealer for their money-factor at the very beginning of the negotiation. Otherwise, they can increase you payments while still showing you a comparable cap-cost. (You can read how dealers make money on the back-end here.)  

Check the lease terms presentd to you using our lease calculator.

Obviously, don’t let dealer tell you that the advertised lease in on only one car. If a lease program is offered on a model it is available on all the cars they have in stock of that model.

Now you have the basic framework to negotiate the lease. Usually these sub-vented leases are very good deals but you can always get a better deal by using our Car Buying Guide to negotiate the dealer’s net cost and their money-factor buy-rate.

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