By Madeline Klein on November 5, 2021 in Life Hacks
There are pros and cons for both leasing and buying a car. Consumer Reports hooked us up with an extensive list.
Leasing Pros and Cons:
- Pros: While you’re driving a late-model vehicle, you usually get a new-car warranty, new safety features, and the ability to drive a vehicle that might be out of your buying price range. Also, when you complete your lease, you don’t have to stress about selling the car, just drop it off at the dealership!
- Cons: It’s not all rainbows and butterflies when leasing. Even though you get a new-ish ride, leasing can cost more because you’re stuck in a set timeline. Plus, if you continue leases back-to-back, the payments don’t stop vs when you buy eventually the payments do stop when you pay off the loan. If you go past the allocated miles for the lease, you can be stuck with additional fees per mile and wear and tear expenses.
Buying Pros and Cons:
- Pros: If you buy your ride, with a loan or with cash, you’re not restricted by mileage limits or wear and tear costs. You’re granted the ability to trade-in or sell your ride at any time if you’re ready for a new one or don’t need a car anymore. Plus, new rides have the latest technology (which you get to pick out) and warranties from the dealership!
- Cons: Unfortunately, buying is ALSO not all positive. Yes, you own the ride, but you have higher monthly payments (usually), long term maintenance costs, insurance costs, and depreciation to worry about. Depending on how you decide to buy/the terms of your loan, you might have a bigger down payment too.
Now you know both the pros and cons of leasing and buying. If you decided to lease, let’s learn how to score a winning price for you!
How to Negotiate a Car Lease
1. Start with research
Research is a very important element of any negotiation. Before going into a negotiation, you should know the leasing lingo so you can have an educated conversation with the lessor. Look into deals offered by the dealership and others and typical sales prices for the vehicles you’re looking at and other similar makes and models.
2. Shop around
Scope out dealerships around town and even expand your search to nearby cities. Not only can this help you score the best price, but also it gives you more research to negotiate with.
3. Be open, honest, and ready to drive away with the car of your dreams
Remember negotiating can be difficult and take quite some time, but at the end of it you will hopefully drive off with the ride with you want at a price you’re comfortable with. If you hate negotiating, check out these tips from Business Insider to prepare you!
Shoutout to Credit Karama for helpful tips and things to consider!
Negotiable Elements
So, what can you negotiate anyways?
- Mileage Limit – If you’re an avid road tripper, you will likely need to negotiate a higher mileage allowance to account for your travel. This is especially important right now with the rental car shortages – it’s not as easy to rent a car as it was before! Be sure to look at the per-mile charge for exceeding the limit to prepare yourself if you are worried about going over.
- Capitalized Cost – Ding, ding, ding! Here’s where your research comes in handy. Knowing the car’s actual cost can set you up for better negotiation here. If you have extra cash on hand, you can apply a down payment and reduce the capital cost.
- Price of Financing – This is basically the interest rate. In leasing, it’s found in the “lease factor” or “money factor” and some quick math needs to be done to find the actual interest rate. Beware, this is not required to be listed on your paperwork, so ask and make sure that it’s not super high.
Conclusion
To wrap this up with a pretty bow, negotiating a car lease is just like any other negotiation. Come prepared, be firm, and get ready to drive away with extra cash in your wallet!