Car lease help

[vampy]

Hello, I hope everyone had a great weekend and enjoyed watching the super bowl (if you’re into that). I’m currently in a lease with a KIA Optima and is ending in April. I plan to lease another one and since this is my second time leasing I have some questions.

There’s people telling me that asking for the MSRP, invoice price, selling price (capitalized cost), money factor and residual value are things I don’t necessarily need to ask since my lease price is fixed. However, there’s been plenty of websites, including this one, where it’s VERY important to ask for these things since I can negotiate the selling price/invoice price in order to reduce my monthly payments.

So, I guess my question is, what should I be asking the internet sales manager? Should I be asking those things listed above in order to negotiate lower monthly payments on my lease? Is there something else I should be asking for? Also, would it be better to roll over any fees (gov tax, dmv, etc) onto my monthly payments? or would that be a personal preference type of thing.

If it helps, I’m looking to lease a 2018 KIA Optima LX (base model no packages) for 0 down 12k miles (I want to ask for 14k or 15k but I’ll mention that to them later). There’s been a KIA dealership saying they can do that for $239/month.

Thanks for any and all help and if there’s any other questions needing to be answered just let me know! =)

Thanks again

PS: Just told one sales rep to email me a lease information sheet, so we’ll see how that goes. I feel it might be easier and smarter to just ask each dealer to email a lease information sheet with everything broken down on it.

 

[Tweak155]

While negotiating the sales price lower of the vehicle will reduce your lease payments, I wouldn't focus on specific areas to help drop the price. There are other ways the dealership can lower your monthly rate, so let them figure that part out. Just keep pushing that the monthly rate is too high and it was "over what you were thinking".

It's only important to specifically focus on the sales price if you think you might buy at the end of the lease.

 

[YuliApp]

why new one? Why not slightly used, especially when no special customizing is ordered?

 

[vampy]

I feel letting the dealership figure out how to lower my payments is a recipe for disaster since they will do whatever possible to make a deal sound good and get the most profit. I rather just lease a new car and not a used one.

 

[NutBucket]

IMHO you should absolutely negotiate the "sell" price. About the only thing you can't negotiate IMHO is the residual.

That said, the residual on an Outback is over 60%.....high residual = lower payments. Food for thought I as I doubt the residual on a Kia is very high.

 

[vampy]

The residual, in my opinion, seems fair. For the kia optima its 57%. So, when you say the "sell" price, does that mean the invoice price?

Also, should I use edmund or trucar to get the invoice price and negotiate below that?? For instance, on edmund I see a 2018 kia optima LX (nothing extra added) for MSRP 23,495 and the invoice is 22,718. OR should I go off the TMV (true market value) like trucar's price of 18,180 (tax not included) which includes certified dealer msrp discount and optima customer cash saving?

 

[NutBucket]

I saw your email. I'm certainly no expert on leasing but I'll try to help. 57% residual seems good IMHO. As I understand leasing you're paying the selling price-residual with the money factor added in.

The selling price of the car is absolutely negotiable in a lease. The KBB invoice price should be close to the True Car invoice price and to the Edmunds invoice price. As you said, the TMV includes all the incentives. IMHO you should start negotiating at invoice price and go down from there. Then tack on the factory/dealer incentives. Or rather, the TMV should be the most you agree on. As I understand it the Koreans are very aggressive on price for these volume models.

Money factor is basically APR on a loan. Simply multiply MF by 2400 to get the APR. I wouldn't go over 3% on a loan so negotiate the MF accordingly. Again, assuming you have good credit.

I'm sure others can chime in so hopefully I'm not totally off. Aren't the advertised lease deals somewhere in the $200 a month range? The key to those is getting the up front cost as low as possible.

 

[vampy]

Hmm okay.. Probably a stupid question but there's so many terms haha. So what exactly is the selling price? How far down should I negotiate the invoice price? is there a specific percentage or something? I don't want to be so low that I turn every dealer off. The MF is .00197 which would equal about 4.7%. Perhaps getting it to 3.5 or 4 would be beneficial.

Thanks again for the advice.

 

[NutBucket]

You negotiate until they say no, then consider leaving. I assume you have lots of choices in dealers. I mean, it's not exactly a rare car you're after. You can't offer 15k, but if TMV is showing 18.X try offering 16.5 maybe or maybe 17.

Agreed that the MF could be lower. I'd aim for 3%, certainly no more than 4 IMHO.

 

[vampy]

To be fair, edmund showed that price of 18,180 which was like 5100 or something off the MSRP (including discounts/incentive etc.). So, perhaps I should negotiate below invoice price a little and then include the incentives? I think 2 dealerships have one or two 2017 left that I want. So I guess I can argue that they should get rid of it. What exactly is the sell or sale price? is that just the new negotiated price?

I think my next plan of action is to request a complete breakdown of everything such as MSRP, invoice, MF, Residual etc.

 

[NutBucket]

Doesn't matter what they show. Chances are you can go lower. A leftover 2017 is awesome. But, just be sure there isn't some difference in residual or something since it's a year older. I'd also see whay they will do on a 2018 for comparison.

https://www.edmunds.com/car-leasing/calculate-your-own-lease-payment.html

 

[vampy]

This is weird... someone is saying that I shouldn't negotiate the invoice price and that I cant negotiate it, BUT I should lower the selling price. So much conflicting info =/

 

[Beer4Me]

I saw your email. I'm certainly no expert on leasing but I'll try to help. 57% residual seems good IMHO. As I understand leasing you're paying the selling price-residual with the money factor added in.

The selling price of the car is absolutely negotiable in a lease. The KBB invoice price should be close to the True Car invoice price and to the Edmunds invoice price. As you said, the TMV includes all the incentives. IMHO you should start negotiating at invoice price and go down from there. Then tack on the factory/dealer incentives. Or rather, the TMV should be the most you agree on. As I understand it the Koreans are very aggressive on price for these volume models.

Money factor is basically APR on a loan. Simply multiply MF by 2400 to get the APR. I wouldn't go over 3% on a loan so negotiate the MF accordingly. Again, assuming you have good credit.

I'm sure others can chime in so hopefully I'm not totally off. Aren't the advertised lease deals somewhere in the $200 a month range? The key to those is getting the up front cost as low as possible.

Lots of good advice here. Also, go here, https://leasehackr.com/

4 negotiable things for a lease:
1) MF (you have to have outstanding credit, otherwise, you're negotiating headroom is nil) - This is essentially the interest that the dealer is making off of you. Pure cash/money for them.
2) vehicle selling price (your most negotiable point. any/all incentives you can qualify for here, which can also help drive the vehicle price below invoice usually only possible on leftovers)
3) vehicle residual value (What the manufacturer think the vehicle will be worth at lease end, this one is hard to negotiate in my experience, because some dealers have a set "value" instituted by the manufacturer depending on lease length and mileage terms.)
4) Cash down (you always want to get a lease deal with ZERO cash down if at all possible, otherwise, what's the point?)

 

[NutBucket]

This is weird... someone is saying that I shouldn't negotiate the invoice price and that I cant negotiate it, BUT I should lower the selling price. So much conflicting info =/

The invoice price is like the MSRP; it is set by the manufacturer. Every dealer you visit will give you the same invoice price for a similar car. Selling price is the actual price you "pay" for the car, a negotiated number.

Americans in general don't like negotiating which is probably why a lot of people really dislike the car buying process. It never hurts to ask and the worst they can say is no. Remember, in the end they still want the sale. If they're too quick to agree then you didn't go low enough

 

[vampy]

Thanks for all the help!

I just want to be as clear as possible and understand 100%.... Is the selling price the price that I already thought would be fair? Or does every car have a selling price... Meaning, should I ask the dealer what their selling price is (along with all the other necessary info)?

EDIT: How do you know how much to offer knowing the selling price? Is there a general percentage off that most people go by? I don't want to go so low that I get laughed at.

Lastly, I've been reading that I should NEVER tell the dealer I want to lease and I should leave that unknown. However, I feel that some information that I need to negotiate with requires them knowing I will lease... How do I get around this question? Do I say I might finance or lease?

 

[NutBucket]

Selling price is the price you and the dealer agree on. Whatever their first offer is, just reject it. If it's the invoice price that's offered, offer $1k less at least. If it's MSRP, still offer $1k under invoice. There's more than one dealer in town.

Negotiating for leasing vs. buying is very similar. Price wise, it shouldn't matter except there are certain incentives that only apply to purchases or leases. It doesn't change how you negotiate the price of the car.

 

[vampy]

Okay, so then I should ask the dealer for the selling price or invoice price? or both?

 

[NutBucket]

You have the TMV which is a good guide. Let them make the first offer and go from there.

How did you lease your current car? Walk in there and yell "please take my money?"

 

[vampy]

Just went with the advertisement. So what do I ask from them then? the invoice? or selling price?And is it important to ask the "out of door" price?

 

[NutBucket]

Usually the way it works is you walk into the dealership, find the car you want on the lot (or at least a similar one), test drive it and then head inside to talk price. The first thing that happens is they'll sit you down and either pull out a 4 Square Sheet or go "talk" to the sales manager and return with one.

Looking at the numbers on Kia's website, it looks like they're offering $189/month for a 36month/36k lease. Running the numbers through the lease calculator I linked earlier, looks to me like the sell price would have to be close to $18k and .00125 MF to work out (without tax, of course). That sounds pretty decent to me.

 

[monkeydelmagico]

little baby jesus, mary, and joseph what a bunch of garbage. A lease is stupid simple. Think of it like rent. You wanna put as little as possible down, have the lowest possible monthly, and not get whacked at the end. Don't get confused with all the jargon. Just set your price points and stick to them. If you want no money down, $239.- an month, and a 15k annual mileage just say the words. If they do it, great. If not go find something else to rent for the price you want.

 

[NutBucket]

Thanks, I was trying to be nice (for once?)

 

[vampy]

What's simple to you may not be for others. It's more involved than that and I rather not have every dealership around me deny me.

Nut, is that for 0 down? Plus I much rather do a 24month lease.

 

[NutBucket]

Look it up on the website. I think it was about $2300 at signing.

 

[Meghan54]

Thanks, I was trying to be nice (for once?)

Eh, why?

Go back and re-read all the OP's postings. I found it interesting that the OP's English usage seemed to morph from "Engrish is my second language" to almost what could pass for a native English speaker's grammar/diction/nuances.

And since the OP has already leased one new vehicle, it seems odd that he has no clue about the process, cannot fathom or comprehend the difference between the MSRP/sticker price on a vehicle vs. the actual selling price negotiated by the buyer and seller.

Almost makes one wonder if this is just another trolling post....