MoolahMonkey

Leasing a ride

I’ve leased 2 cars on my own and have helped 5 of my friends lease theirs. 4 years ago I leased my first car. I’ve found that a lot of people talk shit about leasers because they think you can’t afford to buy a car. That’s not the case. I understand that most people don’t understand the concept of leasing so fuck them. If you think leasing may be for you, then go for it.

Is Leasing for you?

If you know you want a new car every 2-3 years, don’t mind making monthly payments, and don’t drive a shit ton of miles all the time, then leasing is for you.

Figure out what car you want.

This is the most important step! One day I took one of my friends car shopping and she had no idea what car she wanted. We went to 6 different dealers, different brands and she had no clue what she really liked. Figure out what car you really want. Go to a bunch of dealerships and sit in every car. If you seem to like it, take it for a test drive. Do that until you find the car that absolutely gets you dripping wet. As for the dealer guys trying to hustle you? When you walk in, simply just tell them you’re looking around. If you find a car you like and test drive it, they’ll probably try to hustle you and get you in the office to talk numbers. You can say “no thanks” and walk away, or say “We can talk numbers but I’m not buying today.” After they’ve presented you with numbers, tell them “Again, I’m not interested in buying today, but I’d be happy to take your card.” Most of the time they’ll play nice, but if they’re a fucking douche just walk out and write a shitty yelp review on them. More about talking numbers later..

Figure out your budget.

This probably should have been first but I think most people undermine themselves in terms of leasing a car they actually want. Now’s the time to figure out what you can afford monthly for a car payment. You’ll also need some cash aside for some upfront payments ($700-$1500+ depending on car/terms).

Call your insurance. You’d hate to do all this work and lease a car only to find out your car insurance is helllllla expensive. Fuck that. Get a few car insurance quotes and see if everything fits into your budget.

Research

Get your credit score then go to truecar.com. I used this tool to find out what people are paying for the same model in my area with my credit score. Find what the average upfront costs were and monthly payment. Use this as your KPI. You want to beat this target

Get familiar with leasing terms. Go to leaseguide.com. It’s a great resource that’ll help you easily understand the concept of leasing. You’ll want to know things like Money Factor, which is another way of saying interest rate if you’re buying the car. And Capitalized Cost Reduction, which is like a down payment. Key thing is to know your shit, or you’ll get fucked.

The fun begins

I used Edmunds where I entered my info and the car I wanted, and they send your info to dealerships near you. Within 10 minutes, I was getting calls from several dealerships. They’d ask what color and options I wanted. Then I told them I want to lease. How much do you want to put towards cap cost reduction? “$0,” I said. What’s your credit score? “710.” They’ll give your monthly and say you have to pay the 1st month plus DMV fees upfront. After you hear from 3-4 dealerships, use the info you got as leverage and start negotiating for the best deal. Example: “Capital Honda offered me $300 a month with $0 down. Is that something you can beat?”

Now, some people put down $2500 towards cap cost to reduce their monthly payment. I prefer not to do this and that’s because if you total your car (knock on wood), your car insurance and gap insurance would pay off the remaining balance, but you’ll never get that $2500 back. Your goal is to minimize your upfront costs and get the monthly payment you targeted.

Going to the dealership

If it’s your first time doing this and you’re nervous like I was, add a time constraint in case you feel like you’re getting screwed. That way you can tell them you gotta go and try another dealership later. I ended up going during my work lunch lol. I also brought my best friend VP with me. If you bring a friend, don’t bring someone that’ll just sit there and play with their phone (useless ass friends). Bring a wingman. Someone you know that’ll have your back when the offer is on the table.

Also, if you think you’ll get there and sign your papers with the deal you discussed over the phone, that’ll probably not happen. They may try to get more money out of you in person.

Here’s the deal discussed over the phone:

  • $217 a month
  • $500 upfront costs (DMV fees + first month payment)
  • Money factor = 0.0004125 (equals .99% APR)
  • 3-year lease

I met with the internet guy and told them the deal we discussed over the phone and car model. You sit down and they’ll give you a form to fill out to run your credit. When they come back with the results is where things get interesting. Now, this is where knowing your credit score, leasing lingo such as money factor, and negotiating come into play.

Let’s call the dealer dude Steve. Steve comes back with my credit score, and tells me that the offer they gave me over the phone was for people with top tier credit. And with my credit the monthly payment jumps to $272. I ask him what the money factor was and he tells me 0.002875. I immediately bust out the calculator on my phone and find the APR is now 6.9%.

6.9% = 2400 X 0.002875

Me and my best friend are both like wtf?! Fuck that shit. I tell Steve that wasn’t the deal we discussed and that I have to head back to work (see that time constraint working?). We both get up and Steve says “Hold on, let me talk to my manager and see what we can do.”

He comes back with $245 a month plus 2-years of free maintenance. Remember our target is $217. That’s certainly a lot better than $272 a month, but the maintenance? It’s a fucking Honda. It needs an oil change every 7,000 miles. Me and my best friend get up again and I tell Steve I gotta head back from my work lunch lol. He again tells me to please wait and he’ll talk to his manager.

Steve comes back with $233. Me and my best friend say that’s still too much, and then you hear things like:

Come on. It’s $233 a month. That’s affordable. That’s the best I can do…

We go back and forth and I tell him that’s not the deal we discussed. I have solid credit. My best friend argues we could be using that money for food. (That wingman to have your back)

Steve looks at us like we’re cheap ass motherfuckers and we are. Ain’t no shame. He says he can do $227 and I agree to that and we shake hands on it. This is after 1.5 hours of sitting there, waiting, and going back and forth on numbers. Could I have done better? I think so. Am I perfect? Nah. I came out with an affordable monthly, and a new car for me and my son. My biggest achievement was me seriously negotiating for the first time and holding my own. I didn’t have my dad there to hold my hand and negotiate for me like all my friends had. And I didn’t take the bitch way out and go through the Costco program. It was all me with a little help from my best friend haha.

Final thoughts

This is just one example of leasing a car. This is actually how it went down my first time. I picked up a new lease about 6 months ago, and went to the dealership and negotiated on my own. I went to 5 dealerships and didn’t utilize phone negotiations as much. I ended up going to a dealership to see if they can beat the best offer I had. They did and I leased a new car from them, and I hit my truecar target on point.

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