Originally Posted by
freshmanjs
This is commonly given advice. However, I think it actually makes it easier for dealer to take advantage of you on a lease. They can then add fees and increase the money factor or mess with the term to get you a worse deal.
Originally Posted by
cato
Hmm. How so?
My starting point is to find the car I want and then ask for quotes from as many dealers as I can find within a reasonable distance. I then ask the final three to bid against each other, telling them that I will come in and buy the car from the one with the best price.
I only start the financing discussion once I get to that dealer, but I already know who to go to if I do not like what they are offering.
I think what freshmanjs is saying is that the actual cost of the car has little relevance in your lease payments because the dealer can tweak the money factor (interest rate) or the residual value so that you're paying more for the lease per month than you would if you went into the dealer with a monthly payment in mind. The price of the car for purchase has little to do with a monthly lease payment because other aspects that go into a lease payment can be manipulated by the dealer after you've settled on the total price of the car.
For example, you could agree that the purchase price is $20k, but even with that number agreed to by both parties, if the dealer raises the money factor or lowers the residual value, you will pay more per month over the 36 (or whatever) months before you return the car. In some ways that $20k number is arbitrary. The car could be $25k at another dealer, but with a lower money factor and/or a higher residual value, you could pay less per month, which is all you really care about with a lease.
Rich
"Failure is Not a Destination"
Coach K on the Dan Patrick Show, December 22, 2016