How can we be confident that we're getting a great deal on a car lease?
As someone who has negotiated a few car leases, I wanted to truly grasp the pricing dynamics. While living outside a city, cars become an essential part of daily life, tempting us to overlook the details. However, considering the budget implications, even a modest car can be one of the largest yearly expenses for a household, aside from their primary residence.
To comprehend car lease pricing, I focused on two main aspects: (1) understanding the calculation of monthly payments, and (2) normalizing the offer using a dollars-per-$10k-of-MSRP metric.
We compare the lease cost per $10k of MSRP to an index of values based on car quality, which helps gauge the attractiveness of your lease deal.
Domestic and standard cars typically offer more significant discounts compared to MSRP than imports, likely due to factors such as tariffs, quality, and demand. This is why there's a distinction between car types.
For instance, a European car with a $45k MSRP, particularly in the luxury segment, generally has a more rigid price than a US make with the same MSRP, resulting in higher values. However, these prices are still negotiable in most cases.
By understanding the elements that make up a car lease, you'll know which terms can be negotiated. Comparing your price to benchmarks will help you determine if negotiation is worthwhile.
If the negotiated price aligns with the competitive mileage benchmarks shown in the table below, you can rest assured you've secured a good deal. If your price is significantly lower, I'd love to hear your tips!
On the other hand, if your price is much higher, it's possible that you're knowingly purchasing a high-demand car capable of commanding premium prices, or you may need some assistance in securing a better deal.
Select Mileage
Select Car Type
Enter MSRP
Enter % Discount to MSRP (as decimal)
Enter % Residual Value (as a decimal, ie 55% = 0.40)
Enter Money Factor (as decimal value)
Enter All Upfront Cash (Downpayment_
Enter Months (as integer)
Click to Calculate!
Equivalent Price per All-In $10k MSRP
| Class of Car | 7.5k Miles | 10k Miles | 12k Miles | 15k Miles |
|---|---|---|---|---|
| Standard/Domestic | $107 | $117 | $125 | $136 |
| Luxury | $105 | $125 | $141 | $165 |