How to Get the Best Deal

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LET'S FACE IT: Leasing a car is complicated. It's also more expensive than it used to be. While manufacturers are starting to subsidize vehicles again, leasing is still more expensive than it used to be. So in this environment you'll need to be savvier than ever. You also need to be aggressive. For example, one way to knock down your out-of-pocket costs is to demand that the dealer waive the upfront costs such as the acquisition fee, security deposit and processing fee, says Philip Reed, consumer-advice editor at, the web site for Edmunds Automobile Buyer's Guides. Most people don't realize that nearly everything about a lease is negotiable, he says.

Of course, to be an effective negotiator, you need key information about the marketplace. So before you stride onto the showroom floor, here's the lowdown on what information you need to gather.

Which Cars Are Moving?
One way to find a deal is to target those cars that dealers are looking to get rid of because sales are slow. (Not surprisingly, these are often the same cars the manufacturers are subsidizing.) Your dream car may not be in this group, but you may find one among them that would suffice. To get information on these trends try Fighting Chance in Long Beach, Calif. It sells informative tip sheets on the car of your choice for $34.95 ($9.00 for each additional car). The sheets show whether a manufacturer is offering dealer incentives and analyzes how your selections are selling. You can also find consumer incentives and leasing specials on

Pricing Data
Once you know what type of car you're interested in, it's crucial to have a rough understanding of your opponent's bottom line. After all, if you don't know how low a car dealer can go, how are you going to know when to push for a better price?

Your first step should be to find the car's invoice price. Also known as the factory invoice, this number is essentially what the dealer paid for the car. Your lease will be based on "the capitalized cost," a price you negotiate somewhere between the invoice price and the MSRP. (The MSRP is the "manufacturer's suggested retail price".) In some cases you can get a dealer to accept only a few hundred dollars above the invoice. Sometimes cash incentives from the manufacturer even make it possible for dealers to sell cars for less than the invoice price. You can find detailed invoice-price information from (click on "True Market Value"), IntelliChoice (look under new car research tools) or from another site called LeaseWizard, a service of LeaseSource. For $34.95 you get an auto lease and loan analysis kit and six lender quotes. Within the report you'll find the car's invoice price as well as additional information.

Residual Value
You'll also need a reasonable estimate of the car's residual value at the end of the lease. The industry's definitive source for this information is The Automotive Lease Guide (805-563-0777). But the best place on the web for consumers to find residual-value numbers is Just click on the "True Cost to Own" section and enter a car. Then scroll down until you see the "Expected Resale Value." has a partnership with ALG, says Jeannine Fallon, a spokeswoman for Keep in mind, when a manufacturer subsidizes a lease, it often inflates the residual value artificially. The higher it is, the lower the monthly payment. If you want to buy the car at the end of the lease, watch out for this inflation.

Interest Rates, Sales Tax and Trade-Ins
Finding interest-rate information for leases (which is known as "the money factor") is easier than ever. You could call around to local dealers, but you're probably better off going online and paying for the information. LeaseWizard, which provides a list of all the key players in your area, will tell you about the three best leasing deals, adding in a fair dealer markup based on where you live. If a dealer won't give you the deal you want, move on to another.

What to Demand of the Dealer
We can't say it enough. Dealers are masters at steering lease customers away from a car's somewhat daunting purchase price in order to gain an advantage in their negotiations. The focus is always on the monthly payment, which is repeated like a mantra. Part of the reason this works is that the monthly payment is all many customers care about. "Can I really have a BMW for $498 a month?" you might ask yourself. "I can afford that." Maybe so. But if the dealer has gotten to that number by inflating the car's capitalized cost to somewhere near or above the MSRP while extending the term of the lease to four years, you're getting ripped off. The question should be, "Could I have this same car for $400 a month?"

Of course, dealers must disclose the terms of any lease deal. They'll hand you a sheet of paper with the numbers on it and you can promptly plug them into our Monthly Payment Calculator. The calculator allows you to run your dealer's numbers yourself. It also lets you compare them side-by-side with your own estimates of what fair market value should be. Use this comparison to haggle for a better deal. Also, if you plan to trade in a car, ask the dealer for an estimated trade-in value. Usually, that is derived from the Kelley Blue Book value (estimates are also available from's True Market Value).

If you plan to visit a few dealerships, another approach is to use our Net Interest Rate Calculator to compare different deals. As opposed to deriving a monthly payment, this calculator assigns a value to a lease contract -; plus any fees you pay -; and expresses it as a single "net" interest rate. You can then derive net-interest-rate figures for several competitive leases to see which is best. In any event, the lower the number the better. And as we mentioned above, the LeaseWizard software will provide you with this information and compare the three best offers available in your area.

Also, if you can't find a dealer who'll give you the deal that you now know you rightly deserve, try contacting an independent leasing company, says Michael Kranitz, creator of LeaseWizard. Typically, an independent leasing company will charge more than a dealer. However, in this competitive market, you may find one that will match your price.