Chapter 7: Leasing A Vehicle (continued)

•  Be well informed about leasing to avoid the pitfalls
  
•  Consider mileage and warranty limitations
  
•  Leasing your new vehicle-the process
  

Leasing your new vehicle-the process

1. Dress well and be confident. A salesperson will approach you. Know the vehicle you are looking for, the options package you want and be prepared with a folder full of information and price target decided in advance.
   
   The goal of this step is to have the salesperson recognize you as a serious customer who knows what they want.
   
   
2. Specify the vehicle, model, options package and mileage allowance that you want and discuss the your cost in terms of capitalized cost (purchase price), residual value and the money factor. Make sure they know that you know what you are talking about and feel free to show them your information folder.
   
   Your goal is to control the context of the negotiation. Don't let them blur the issue by discussing monthly payments, switching options, models and/or changing the subject to talk about you and what you want.
   
   
3. Continue your strategy to control the context of the negotiation. By keeping the focus on the elements of the deal that you know the most about, you take away the dealer's ability to work in profits you are unaware of.
   
   Your goal is to get them talking about the lease in your terms. If you stick to your guns on these price factors you may end up talking to a sales manager or finance manager; somebody with more authority to cut a deal.
   
   
4. Make sure you have a warranty that lasts for the duration of the lease. Don't put yourself in a position where you have to pay expensive repairs only to return the vehicle at the end of the lease.
   
   
5. Counter their arguments by returning to the information you have at hand. Let them know that you know the invoice price, the holdback, the demand, dealer incentives and so on and that you have based your offer on an appropriate capitalized cost, residual price and money factor. Tell them the profit they will be making on your lease and let them know you are not prepared to give them more than that.

   This will re-affirm your position of knowledge. At this point you will likely be talking with a sales-manager or a salesperson aware of the limits from consultations made on your behalf. They should counter-offer at this point.

6. Don't make any offers after the first one. It is tempting to say 'meet me halfway and we'll talk', when the halfway mark is your real target. This is a mistake. Tell them "No thanks, it is still a little too high." until they make a satisfactory offer or meet your real target--then say you'll get back to them within a couple of days. Let them know where to contact you if they decide to go down to your opening offer.

7. Phone or visit a few more dealers and see if you can improve on this lease offer.

   If you've got the deal you want, the car you want and the options you want, it is time to get the rest and see the finance manager. Make sure that you get any special offers that may apply to you.

8. Don't allow your negotiation to go bad at this point by signing a bad deal with the finance manager. Remember to watch out for low monthly payments. In a lease, the dealer usually compensates for these with a low mileage allowance, a high residual value or other fees, leading to a higher total price in the end.

Congratulations on your new vehicle!

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