Leasing questions.

wing_zealot wrote:
Jallen - two points.
First, the interest rate is negotiable. Different lease companies have different rates. And you can play one lease company against another. You are presuming the lease is through the dealer and the dealer's leasing company. You don't have to lease the vehicle through the dealer.

Second, the residual value is negotiable. By your own admission different mileages are available. That goes strictly to the residual value of the vehicle. But even there, different lease companies can use different residual values.

I urge anyone considering a lease to go online and determine their best lease options and shop them against the dealer's terms and conditions.

I had a leased vehicle, and the lease was not through the dealer. I shopped lease companies for rates and residual values; and shopped dealers for the best vehicle price.

It is true you do not have to lease through the dealer's finance source. But, around 27% of new vehicle sales are leases and the manufacturers captive finance arms lease more than 90% of those vehicles. In most cases today, the manufacturer subsidizes the lease and puts the independent lease company at a severe disadvantage because of this subsidy and their lower cost of funds. It is a rare case when you find even a competitive lease number against the manufacturers source much less one that beats the norm. While you should never say never, for 99% of the lease candidates the interest rate is non-negotiable on mainstream vehicles.

Most all residual values in the U.S. are set using the ALG Guide. Again, manufacturers can and regularly do subsidize this value. Independent leasing companies can set the residual anywhere they want but in reality they would first likely need their funding source's permission and will most likely fail when they stray too far from this guide. You are not "negotiating" the residual value when leasing for higher mileage than normal but rather paying for the increased cost of more miles and the resulting lower value of the product at termination. Again, never say never but 99% of leases will not involve any negotiation of residual value.

In today's lease market, it is simply impossible for the independent to compete against the majority of mainstream leases at the dealership. I have tried. Sometimes, on specialty vehicles that are not subsidized, the independent can be competitive but are dealing in a risky part of the business. The normal shopper almost always only has the price of the vehicle to negotiate.