I was told to negotiate the selling price of a car even if I plan to lease. How does this work if I want the car manufacturer's special lease offer, which list the selling price as MSRP on the lease offer? What happens when I add additional options that is not on the lease offer? Thank you
Susan,
When you lease a car you are paying interest on the difference between the selling price and the lease end value or residual which is set by the manufacturer and finance source. The residual is preset as a percent of the MSRP. So the higher the MSRP the higher the residual. For instance...
36 month lease, 12000 miles a year
msrp $30,000
residual 50% or $15000
selling price $28,000
lease is figured on $13000 plus interest divided by 36 months.
So you can negotiate the selling price.
If you need more miles than the special lease offer allows then the payment will go up because the residual goes down when you add more miles.
When you have a higher MSRP than the car in the lease special then your residual goes up because it is figured off of the MSRP but also your selling price goes up.
I hope this makes sense.
Burnam Eubank, Dealer Principle at Palmetto Jaguar answered on Aug 2nd, 2007
When you add additional options, the monthly payment will increase. Make sure you understand the advertised price and what the down payment is to get to that price. Often the price quoted has a down payment not including taxes and tags. You can make a great deal on a lease if you take the time to negotiate on the options. Buying a car that is in stock at a dealership will get you a better price. Know what features you can live with and without when making a deal. Good Luck!
Jenny Trostel, Partner at Anderson of Hunt Valley answered on Aug 2nd, 2007
Susan, I would suggest that you first pick out the car you want with the options you want. Then ask you would be paying if you purchased the car. Meaning how much has the MSRP been reduced by either rebates or dealer discount. That is the price they should base your lease payments on.
If they won't tell you what the selling price is...buyer beware.
Shelly LoCascio, Dealer Principal at Irwin Lincoln Mercury Mazda answered on Aug 2nd, 2007
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