What parts of a lease deal are negotiable?

Leasing a car is a bit different than buying one, but one thing both have in common is that you can get far better deals when you negotiate properly. Since leasing is more complex than buying a car, you may be unsure what you can and can’t negotiate in a lease agreement. Here are the parts of a lease deal that you can negotiate:

The Cap Cost of the Leased Vehicle

Cap cost is short for capitalized cost, and it’s simply the selling price of the car. Even though you’re not buying the car, the selling price is still important, because you’re financing its depreciation with your monthly lease payments. If you negotiate a lower selling price for the car, then you’ll be financing less and will have lower monthly payments.

Don’t get discouraged if the dealer tells you that the cap cost isn’t negotiable, because this is rarely true. The price would be negotiable if you were buying the car, and that means you can still negotiate when you’re leasing.

There are value guides available where you can look up the current market value of every make and model car. These are a great tool for negotiating, as you can make sure that the dealer isn’t overcharging you and reference the value guide if you don’t feel you’re getting a good deal.

Make sure that you also check for any special offers that could lower the cap cost of your lease further. There could be dealer specials, rebates or other discounts that drop the price.

The Down Payment

Leases are usually available with no down payment, or you can put money down for lower monthly payments. However, the amount you’ll save on monthly payments is rarely worth the amount that you would need to put down. You’re almost always better off telling the dealer that you want to avoid a down payment on your lease.


Since you may return the car to the dealer once your lease is up, the dealer will put mileage limits in your lease agreement. The standard amount is 12,000 miles per year. If you go over your limit, you’ll pay overage charges, and these can be anywhere from 10 to 30 cents per mile.

You’re unlikely to score a lease agreement allowing you 30,000 miles per year, but dealers have a bit of leeway to make a deal happen. You could add a couple thousand miles to your limit if you pay a bit more each month. Evaluate your typical driving habits to ensure that you can stay under the limit with any lease agreement you sign.

The Money Factor

The money factor on your lease determines the interest rate that you pay. Dealers use your credit score to set your money factor, but there is often a markup involved, as well. Check how much interest you’d be paying and try to negotiate it down. It’s possible you could save some money if the dealer inflated your money factor.

Items You Can’t or Shouldn’t Negotiate

While “everything’s negotiable” is a popular phrase, it doesn’t always apply. Here are items of a lease agreement where you can save your time and avoid negotiations:

The Residual Value of the Leased Vehicle

This is how much the car will be worth when your lease is up. The leasing company will use statistics and data from the car industry to figure this out, and you’re probably not going to change their mind. Now, you may be able to negotiate with the lease company about what your buy-out price will be at the end of the agreement. See if the company is willing to set that price lower than the residual value.

Acquisition and Disposition Fees

Acquisition fees are the fees the leasing company charges you to set up your lease contract, and they typically run a few hundred dollars. Disposition fees are fees for cleaning the car and preparing it for sale upon its return, and they’ll add another few hundred dollars. You can’t negotiate these, although you obviously avoid a disposition fee if you purchase the car at the end of your lease.

Monthly Payments

Can you negotiate monthly payments? Yes. Should you? No.

Just like when you’re buying a car, the dealer can work all kinds of magic to adjust your monthly payments, but this doesn’t mean you’re saving money. Always negotiate price instead of monthly payments.

It’s good to know as much about leasing as possible before you visit the dealer. Since the main item that people negotiate with dealers is cap cost, make sure you know the value of the car you’re interested in. If you can negotiate that cap cost down, odds are you’ll get a good deal.

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