Ready-Made Lease Deals – No Negotiating, No Stress

On this web site, we spend a lot of time discussing how to get the best car lease deals, how to negotiate with dealers, and how to determine which cars make the best leases.

One of the things that automotive consumers hate most about buying or leasing a car is the time-consuming and stressful negotiations with a dealer salesperson.

With all of that being said, there is a way to get the best lease deals, every time — deals that are better than any that customers could negotiate for themselves — with no haggling and no stress.

Promotional lease offers from car manufacturers

Promotional lease offers (called incentive leases) are made by many car companies every month on selected makes, models, and styles.

These are limited-time ready-made deals that typically expire at the end of the month, possibly to be replaced by the same or other deals (or no deals) the next month.

The deals usually apply to a specific vehicle model and style although a car company can offer such deals on a number of different models and styles at the same time.

Why are promotional lease deals so great?

With a normal, non-promotional lease, a customer can only negotiate one lease factor with his dealer — price — the  price on which the lease will be based. He cannot negotiate the other two major factors that determine lease payment amount: lease-end residual value and money factor (finance rate).

Since a dealer’s finance company (Honda Financial Services, for example) controls and sets these two factors, a dealer is not able or authorized to negotiate them with customers.

However, a car company, such as Honda or Ford, has the ability to make changes to all lease factors, and offer these changes through its dealers as a way of helping improve sales.

To create the lowest and most attractive monthly lease payments, a car company can discount vehicle lease price as well as boost lease-end residual value and reduce lease finance rate. The company’s dealers can then offer these “packaged” special lease deals to their customers.

It’s impossible for customers to achieve the same thing on their own. And dealers can’t create these kinds of deals on by themselves.

Here is how great car leases are created

Example – Infiniti Q50

As an example, let us take a look at one such promotional lease deal being offered at the time of this writing. It’s by Infiniti for an Infiniti Q50.

For one month only, the lease payment is $369 a month, 39 months, with $2999 due at lease signing. The amount due at signing includes a $2630 down payment and $369 as first month’s payment.

This is one of the best lease deals being offered at this time. It rates very high (88 – Excellent) using our Lease Deal Calculator.

How did they create this low monthly payment?

1. For the promotional deal, Infiniti has discounted the price on which the lease is based by $2748 (MSRP $40,805 – Cap Cost $38,057).

2. Next, they also boosted lease-end residual value to $24,483 which is a very high 60% of MSRP, from a more normal value of about 50%.

3. Finally they reduced the money factor to a very low .00041, equivalent to 0.98% APR interest rate, compared to a more normal rate of .0025 which is equivalent to 6.0% APR.

Compared to non-promotional lease

Let’s compare this special deal with a normal non-promotional lease for the same car, same down payment, same term. We’ll assume a normal .0025 money factor (equivalent to 6% APR) and a reasonable 55% residual percentage.

Assuming no price discount, a normal lease would result in $554.94 monthly payment. Even if we assume the customer can negotiate the full $2748 price discount, which is not very likely, the monthly payment would still be $477.60.

Compared to a purchase loan

It might also be enlightening to compare the special lease deal with a loan purchase of the same car, same term, same price discount, same down payment, same special interest rate. Monthly loan payments would be an incredible $923.30 a month.

Even if we spread out the loan over a long 60 month term, payments will still be $605.28/month— compared to the $369.00/month of the promotional lease deal for the same car.

Summary

Absolutely the easiest way to get the best car lease deals is to look for promotional incentive leases being offered monthly by car companies. Customers cannot get the same deals through normal dealer negotiations.