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Conventional wisdom among many end-of-year car shoppers is to choose the outgoing model year in order to save a few dollars. However, an analysis by nationwide car lease marketplace, Swapalease.com, shows consumers can often get a better lease deal if they opt for the incoming model year, even in December when end-of-year negotiating heats up.
For example, consumers can lease a 2015 Toyota Camry for $293.71 per month, compared to a new 2014 model priced at $319.22. A 2015 Chevrolet Malibu lease is priced at $246.21 per month, while a new 2014 model is priced at $319.74. The reason the 2015 model is cheaper in a lease environment has everything to do with the residual, which in most cases will be higher than that of the 2014. A higher residual value equates to a lower monthly payment for the consumer.
End-Of-Year Lease Negotiation Tips
1: The price of the vehicle (known as the “cap cost”) is the primary point of negotiation on a lease. In much the same way you negotiate the price of the vehicle when financing, shoppers should do so in lease environments as well. Additionally, down payments (“cap cost reduction”) and existing vehicle trade-ins can also play into sales price negotiation.
2: The residual of the vehicle can be adjusted depending on the amount of miles a person needs each year. Lower mileage requirements amount to a higher residual/lower payments, and higher mileage requirements mean the opposite.
3: The interest rate, or “money factor” may also be negotiated in many circumstances. However, credit is extremely important in a lease environment, so the better your credit, the stronger your chance for negotiating a better money factor on the lease.
4: Ask plenty of questions during the negotiation stage and be sure to have the dealer explain in detail how they arrived at a certain monthly payment.
5: If you are going to shop for a lease in December, be sure to have the dealer do a side-by-side comparison of a new 2014 model lease versus a 2015 model lease, especially for the same vehicle make and model. In most cases the 2015 model should come with a lower payment, but this is not always the case.
Headquartered in Cincinnati, Ohio, Swapalease.com is the world’s largest automotive lease marketplace and the pioneer in facilitating lease transfers online. More specifically Swapalease.com matches individuals who want to get out of their lease with people who are looking for short-term lease agreements. Prospective buyers can search the listings for the exact vehicle they want, and then register for a nominal fee, allowing them to use Swapalease.com’s safe online system to contact the prospective seller and close the deal.