How to negotiate a car lease

What you can negotiate on a lease

A lease payment comes from four numbers: the capitalized cost (the price of the car in the lease), the residual value (what the car is expected to be worth at the end), the money factor (the interest rate) and the term. Fees and taxes sit on top.

Two of them are negotiable. The cap cost works like the price of a car you buy: every $1,000 off it takes about $29 off the payment on a 36-month lease. The money factor can often be lowered to the leasing company's base rate when your credit qualifies, because dealers may mark it up.

The residual and the term are set by the leasing company for each model, term and mileage, so no dealer can change them. The acquisition fee usually isn't negotiable either; the dealer's documentation fee sometimes is, depending on your state.

What a good lease looks like right now

We read the lease offers on 273 luxury dealers' and brokers' own websites. Across the 1,631 live offers, the median payment is $707 a month with $6,336 due at signing.

Compare offers by their real monthly cost: the payment plus the money due at signing spread over the term. As a share of MSRP, the median offer costs 1.38% a month. 4% of offers come in at 1% of MSRP or less, the old rule of thumb for a great lease.

75% of advertised offers ask for $5,000 or more at signing, which makes the payment look lower than it is. Only 1% are true $0-down offers.

See every live luxury lease deal, rated against its MSRP.

How to negotiate it, step by step

1. Look up the residual and the base money factor for the car, term and miles you want. Lease forums publish them every month for each brand, and the dealer will confirm them if you ask.
2. Negotiate the selling price first, as if you were buying. Ask for it in writing before you mention a lease.
3. Ask for the money factor as a number, not "the rate". If it is above the base rate for your credit, ask for the base rate.
4. Ask for the full breakdown: cap cost, residual, money factor, acquisition fee, documentation fee, taxes, and every fee due at signing.
5. Check it in our lease calculator. If the numbers don't add up to the payment, something is hidden.
6. Put as little down as you can. If the car is written off early in the lease, money down is gone.

The lease calculator works backwards from any quote, so you can see the money factor and cap cost a dealer used.

An email you can send to dealers

Start by email. You get every number in writing and can compare dealers side by side. Fill in the brackets:

Hi, I'm ready to lease a [year make model trim] this month: [term] months, [miles] miles a year, Tier 1 credit. Please send your selling price, the money factor and residual you're using, and every fee due at signing. I'm asking three dealers and will sign with the best total.

Or let a lease broker do it

A broker does all of the above for you across many dealers, then usually delivers the car to your door. Most are paid by the dealer; some charge a flat fee they tell you up front. It is the easiest way to get a good lease if you don't want to negotiate.

Tell us the car and up to 2 brokers who deliver in your state will quote you, usually within one business day. It's free.