How to Negotiate Your Next Car Lease

You wouldn’t buy a new car without first negotiating with the dealer, and the same standard should also apply when leasing a vehicle.

Continue Reading Below

“It’s important to shop around for a lease,” says Phil Reed, senior consumer advice editor for “People don’t know where to start.”

When shopping around, experts say you can negotiate various factors of your contract, including the price and total allotted miles.

Larry Dominique, president of ALG , says some manufactures offer strong lease programs which make it more difficult for dealers to budge on price.

“If you are in the market shopping for a BMW 328i, which has a strong leasing program, it’s very likely you’ll get the same price regardless of which dealer you go to,” he says. Manufactures offer competitive leasing deals to create repeat business.

While you may not be able to bargain on the leasing price for a BMW or Lexus, you can often get a lower sticker price (and thus, monthly payments) on less popular brands.

Knowledge is power when it comes to negotiating, which is why Reed says you want to do your homework before you step into the dealer.

Start your research price comparison online and then call three to five local dealers to learn about their offers. Offer the same down payment amount and mileage to conduct a fair price comparison.

You also want to know the sticker and manufacturer’s suggested retail price (MSRP) of the car you are looking to lease. Any amount below these numbers means more savings for you. “Another really important thing to do is to choose cars that hold their value really well because they will have a good residual value,” says Reed. “If your car is still worth a lot at the end of the lease, your monthly payment is going to be lower.”

Dominique at ALG says many people run into financial trouble when they go over their mileage allotment for the year and are hit with penalties. But those penalties, he says, can be one of the things you negotiate out of the lease agreement.

“A lot of people don’t pay attention to that, but I think it’s important,” he says. “If you go over your miles, some charge 20 cents a mile.” If you can’t get the dealer to waive any overage fees [ask] for more mileage.”

How much you put down can also be negotiated. Dominique explains you can set up a lease without any down payment, but warns that means higher monthly payments. “It’s really important to understand the fine print relative mileage and upfront costs.”

Even the interest rate on a lease can be reduced, but that can be tricky, according to Reed because it’s hard to see the rate because it’s shown as the car’s “money factor.”

The money factor is the amount you’ll pay in finance charges each month so you want that to be as low as possible. According to, the money factor is expressed as a very tiny number, such as .00275. To convert that to an equivalent annual interest percentage rate (APR), the website says to multiply it by 2400. So if the money factor on the lease is .00275, you will be paying 6.6% APR.  While the dealer may not be able to offer a lower money factor because it’s not controlled by the dealer, but the leasing company you can ask the dealer if there other leasing finance companies that may offer a better money factor.