Negotiating the lease. - Contractor Talk - Professional Construction and Remodeling Forum

ultimatetouch · 07-01-2007, 09:13 PM

I am making the decision to lease. I like what Ken and Mike had to say about leasing. Its time to negotiate. What am I negotiating in a lease? Is it just the monthly payment? Any tips Mike and Ken especially both being former used car salesman...Id apreciate it.

Mike Finley · 07-02-2007, 10:43 AM

Negotiating a lease is no different then negotiating any other type of car deal, with the exception that you will focus totally on the payment. Focusing on the payment in a finance situation will get you into hot water, but on a lease it is all that counts.

#1 negotiate everything into that payment right from the start. You want the entire package in the price you are negotiating. Don't negotiate the payment then add on extra miles or upgrade the sterio or add anything else. That's where you will get screwed. There is a whole game of what is 'residulized' and what is not. "hard add ons' can be residulized and soft add ons can not. The more that is residulized the less it costs you since those add value to the car and will be considered in the value of the car as it deprciates. If you want extra miles make sure you add those in before not after you get your payment.

To avoid all of the issues of soft and hard adds, simply negotiate the entire package right from the start then it's just a final number.

Good credit means no security deposit. Leasing before or financing before means no security deposit. Security deposits have always traditionally been equal to your payment.

Keep in mind your car payment will be 2 parts : Part 1 is the payment on the vehicle and part 2 is the sales tax on the payment based upon where you live.

Negotiate as I said before with everything included. Make sure you tell them you want the out the door payment including everything, including your sales tax.

#2 This is the most important - Take your time and go to more than one dealership. With leases it is very difficult to compute your lease payment yourself. Your best defense is to have something to compare the price you are give to. You do that by talking to more than one dealership. (This is the 3 bid system we all face in contracting right? Only difference is in this situation all 3 contractors are offering identical quality and service the quality x factor doesn't exist)

After I was out of the business the way I would lease cars was to figure out exactly what I wanted, then call 5 dealerships and get the final price over the phone. Before I ever walked in to the dealership to purchase the car it was all over except the signing of the documents.

You should know that leasing offers up some serious benefits, BUT you must be confident of what you plan on doing. There is no out of a lease before the term is up. If you are signing a 3 year lease be prepared to make every single payment. Leasing is a situation where if you fit what a lease is, you will benefit greatly from it, but if you try to deviate you will screw yourself 3 times over. Keep it to term, drop it off and hand over the keys.

PressurePros · 07-02-2007, 12:06 PM

The first step I would take would be to check residuals and lease incentives from the different manufacturers and makes. Here's why..

In 1993 I made my first foray into the foreign car semi luxury market. I hit Nissan (maxima) Toyota (Camry) Mazda (929 maybe?), and Mitubishi (Galant)

These cars were all running about $25 K loaded the way I wanted them. I had perfect credit and was looking for a no money down, tax and tags payment of around $425. When it came down to it the actual winner was a $37,000 two door Acura Legend in Milano Red (God, I miss that car). I walked out of the Acura dealership with a payment of $427/month because the residual value on the Legends was very high and moreso because Acura was putting money on the street to increase the profile and visibility of the company.

Look around the web. There are plenty of sites where you can find behind the scenes information.

theartisan · 07-02-2007, 01:45 PM

fwiw I use edmunds.com for researching vehicles before i hit the dealership. I have always foudn the info there reliable and useful in negotiations

dirt diggler · 07-02-2007, 02:24 PM

Quote:

Originally Posted by ultimatetouch

Its time to negotiate. What am I negotiating in a lease?

lol

i'd say the first step is to figure out what you want to negotiate ...

Grumpy · 07-02-2007, 05:13 PM

I didn't read all the advice posted above, but I do know they get ya on the miles. Specifically look to see how many miles you are allowed and what your overage will be if you go over the miles. If you are going to be using the car for estimating and you have a 20,000 mile limit, you will be over that limit in a few months, whereas the average person drives something like 12,000 per year.

ultimatetouch · 07-02-2007, 09:46 PM

Quote:

Originally Posted by Grumpy

I didn't read all the advice posted above, but I do know they get ya on the miles. Specifically look to see how many miles you are allowed and what your overage will be if you go over the miles. If you are going to be using the car for estimating and you have a 20,000 mile limit, you will be over that limit in a few months, whereas the average person drives something like 12,000 per year.

That certainly something to think about and even negotiate. Where the heck are you doing your estimates...you must have a large coverage area..I have cut down on my zip codes with lead services. I try to keep it realy close to my house..although I have an addition in evanston, and one thats almost in Indiana. Everthing else is in my back yard.

Grumpy · 07-03-2007, 07:05 AM

I find the average full time estimator, running 3 leads per day and inspecting his/her jobsites, drives 100 miles per day. There are about 200 working days per year.

Mike Finley · 07-03-2007, 08:11 AM

Isn't this a personal vehicle?

If this is a work truck I would say be careful about leasing it. The assorted scratches, nicks and pings and dings that come with work vehicles on job sites will be quite an issue when it comes time to do your return.

Stone Mountain · 07-04-2007, 04:36 PM

The most important thing to know about leasing is the fact that you are esentially stuck with the payments for the full term of the lease.
If you lease a vehicle with a high resale value (or low depreciation), then 2-3 years into the lease the value of the car is more than or equal to the payout to get out of the lease. If you get a vehicle that doesn't do as well, and you want out, you will have to pay out of your pocket to do it.
For example:
1] 2001, my son leased a Honda Civic coupe. 3 years into a 4 year lease, he decided to buy a mustang. He was able to walk away from the lease without having to spend a penny because the car was worth more than the remaining payments.

2] In 2004 I wanted out of a lease on a 2002 Chevy pickup, an HD 2500 4x4. I literally sold it back to the dealership and pocketed $2500.

3] We leased a 2004 Murano in Nov 03. After 2 years, we no longer needed it, nor liked it. However,
At 30 months, the dealer offered me $5000 less than the remaining payments, and refused to let me trade it elsewhere OR sell it privately.
The lease is up in 3 months, and if I want to get out of it, I am STILL $3000 upside down
I almost leased a Toyota Hilander, but it was $5000 more. Today it would be worth at least $10,000 more than the Murano, because Toyotas have so much better depreciation.

I will think 3 times about leasing again.

PressurePros · 07-04-2007, 06:22 PM

I used to be a guy that had to have a new car...ego driven young guy thing. If you know that going in, you should opt for a little bit higher payment and get a two year lease.

Grumpy · 07-06-2007, 09:39 AM

Personally me, I hate to make payments on anything. I prefer to buy slightly used vehicles, flat out if possible. I find the cost to be much cheaper, and the vehicle is damned near new. New enough for me.

I've ONLY owned one new car, and that car was a company vehicle bought for me at the last job I had, and I bought that pixckup from my old boss.

I've found it's about 5 years before vehicles start to need any repairs other than regular routine type maintenance.

PressurePros · 07-06-2007, 10:40 AM

I agre with you 100%. I let someone else pay the depreciation on vehicles. Today's cars especially. Most of them need nothing major for the first ten years.

Mike Finley · 07-06-2007, 03:33 PM

Quote:

Originally Posted by PressurePros

Most of them need nothing major for the first ten years.

Wow, I drive 20K a year by accident. 10 years would be 200,000 miles. I don't see cars going 100K without getting in your pocket in a serious way. 150K look out. 200K, no freaken way are you going to catch me with something I'm turning a key in with 200,000 miles on it. But that could just be me.

Greg Di · 07-06-2007, 07:05 PM

Quote:

Originally Posted by Mike Finley

Wow, I drive 20K a year by accident. 10 years would be 200,000 miles. I don't see cars going 100K without getting in your pocket in a serious way. 150K look out. 200K, no freaken way are you going to catch me with something I'm turning a key in with 200,000 miles on it. But that could just be me.

I hear ya. I have never "bought" a car in my life. I've leased everything because I like getting new car every 3 years and I will always have a car payment, so I might as well not be stuck with a financed car that I finally own after 5 years only to own a 5 year old car that is out of warranty and everything wear-related needs to be replaced.

I had an Infiniti G35 (leased) that I liked, but it really didn't suit my lifestyle, so I traded it in and got a Jeep Wrangler (lease). I was upside down on the Infiniti, so I made sure I went to a major auto group Jeep dealership that also sold Infinitis so they had a way to resell the Infiniti instead of just wholesaleing it and burying me more. It cost me about $10 per month extra on the Wrangler, but it was worth $360 to me to get out of the Infiniti lease.

I did purchase my work vehicles because they get too beat up to fathom leasing.

ultimatetouch · 07-11-2007, 08:09 PM

Quote:

Originally Posted by Grumpy

Personally me, I hate to make payments on anything. I prefer to buy slightly used vehicles, flat out if possible. I find the cost to be much cheaper, and the vehicle is damned near new. New enough for me.

I've ONLY owned one new car, and that car was a company vehicle bought for me at the last job I had, and I bought that pixckup from my old boss.

I've found it's about 5 years before vehicles start to need any repairs other than regular routine type maintenance.

That was my take on things to. I brought a 2001 durango in 2003 with only 12,000 miles. I purchased a new van for work 4 yrs ago because I new I was going to keep it for at least 5 yrs. Now I think why the hell would I want to cough up so much dough for a depricating hunk of crap..like pressure pros said. You could invest that money and just rent the car. I want my funds to be liquid so I could invest when the oppertunity comes.

ultimatetouch · 07-11-2007, 08:13 PM

Quote:

Originally Posted by PressurePros

I agre with you 100%. I let someone else pay the depreciation on vehicles. Today's cars especially. Most of them need nothing major for the first ten years.

So you lease a used car? I didnt know you could do that.

Kiner · 06-26-2009, 03:47 PM

So is the general consensus to not lease work vehicles? I was sold on the idea of leasing a two year old truck - letting someone else pay for the depreciation - and getting to trade in for a newer model every three years. But I am thinking that if it gets as beat up as i think it's going to get, I'll be hosed by the dealer at the end of the lease for damage to the vehicle. So what option do I have other than buying an old used truck?