How Leasing WorksBefore you can negotiate the best lease payment possible you need to understand how a lease payment is calculated. To most people looking to lease a vehicle how a lease payment is calculated is a mystery. Once you understand how it works and how lease payments are generated you will be a master at negotiating a lease.
The first thing we want to focus on is the Capitalized Cost. Also known as Cap Cost, it is the Sale Price of the vehicle. This is what the dealer is selling you the vehicle for before any rebates or trade-in allowance. Anything that reduces the Cap Cost is called a Cap Cost Reduction. This can refer to a down payment, rebates or trade-in value. |
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So when we take our Cap Cost and subtract our Cap Cost Reduction, we get our Net Cap Cost. The next piece of the puzzle is going to be the Residual Value. This is going to be the value of the vehicle after the lease term is up. The Residual Value will be a pre-determined value set by the manufacturer depending on term and miles per year.
The only thing that's left is our Interest Rate or Money Factor. Some lease companies will try to use a money factor instead of a rate to confuse the customer. If you ever see a money factor instead of a rate you can simply multiply the money factor by 2400 to get the rate.
Now we can take the Net Cap Cost, subtract the Residual Value, divide it by our Term and add our Rate and Taxes to get the payment.
The only thing that's left is our Interest Rate or Money Factor. Some lease companies will try to use a money factor instead of a rate to confuse the customer. If you ever see a money factor instead of a rate you can simply multiply the money factor by 2400 to get the rate.
Now we can take the Net Cap Cost, subtract the Residual Value, divide it by our Term and add our Rate and Taxes to get the payment.
Auto Broker Car Leasing Service
Our professional car negotiators have years of experience in the automotive industry and know every aspect of the business. With over 15 years of management experience in a car dealership, we know how leasing works and what it takes to get you a great deal.
We know what the dealership owns the vehicle for and can negotiate you the best price on any new make or model. From finding vehicles, negotiating pricing, rates, to trade-in values, we can help. We do not work for the dealer, nor do we accept commission or any form of payment from the dealership. We work for you, and only you, the car buyer! Buying a car is the second biggest, if not the biggest purchase you will make in your lifetime.
Would you buy a house without a broker? Don't make that mistake when buying a car. We are your personal car negotiator.
We know what the dealership owns the vehicle for and can negotiate you the best price on any new make or model. From finding vehicles, negotiating pricing, rates, to trade-in values, we can help. We do not work for the dealer, nor do we accept commission or any form of payment from the dealership. We work for you, and only you, the car buyer! Buying a car is the second biggest, if not the biggest purchase you will make in your lifetime.
Would you buy a house without a broker? Don't make that mistake when buying a car. We are your personal car negotiator.
