Are car lease prices negotiable?
Can car lease prices be negotiated?
The short answer to this is ‘not really’, more often than not the only part of a lease you may be able to successfully negotiate is the brokers’ administration fee. In this article, I’ll explain how your car leasing price is made up and how and when you may be able to negotiate it.
Please keep your expectations low, negotiating a car leasing price down can be hard work and is only likely to be very mildly successful in best case circumstances - it’s not like haggling for a used car where a savvy buyer can save significantly.
How are lease prices calculated?
Lease prices are calculated based on several important component factors:
the depreciation fee
the finance fee
tax (VAT)
cost of the car ( inc any optional extras)
lease terms
your credit rating
broker admin fee
The depreciation fee accounts for the vehicle's expected loss in value over the lease term.
The finance fee is essentially the interest charged by the finance company for lending the money, and sales tax is the VAT applied to the purchase. While these elements are non-negotiable, the overall cost of the vehicle, which forms the basis of these calculations, can be negotiated.
Various factors influence lease prices, including the car's original price, the contract length, annual mileage requirements, the driver's credit rating, the type of lease contract, and any optional extras or package add-ons. Therefore, understanding these variables is crucial when negotiating a lease price.
Which part of the price is negotiable?
Now you know how lease prices are calculated you can hopefully see that the vehicle's price and the broker admin fee are the only negotiable elements of the car leasing price.
The cost of the vehicle is largely out of your hands, it’s down to the broker or finance provider to get discounts from manufacturers, this is usually based on purchasing in bulk from a manufacturer. You can of course choose something in standard spec with no additional options or perhaps take whatever option that the broker or provider has in stock already as these stock vehicles may have been heavily discounted bulk purchases. Being open to different spec vehicles will generally get you the best deal (to be clear, sometimes you can get a better price by taking a higher or lower spec vehicle than you would ideally request).
Brokers often only take a small commission for arranging your car lease so often charge admin fees up to £300. The broker is unlikely to give this away as it’s a crucial part of their margin and may be the sole part of the transaction that makes their business viable (sourcing car leasing leads is an expensive and competitive business). This is also generally the only part of the cost that is solely in control of the broker so you may have some chance of getting this fee reduced.
Also, try to do everything you can to keep your credit rating as good as possible. You’ll find sites like MoneySavingExpert can offer advice on ways to improve your credit score. The best deals go to those with the best credit rating.
How to get the best car lease price
It’s pretty simple really. Follow these steps to make sure you get the best possible price on your next car lease deal:
Do whatever you can to improve your credit score in the weeks and months leading to your next car lease. If you already have a great score (900+) then you can skip this step.
Shop around - I suggest heading over to a great comparison site like LeaseLoco and looking at the deals with the highest Loco Score : the higher the score the better the value of the deal.
When you make your car leasing enquiry, chat with the broker, say you like the car but the price is a little too high and the admin fee is a problem. Ask them what can be done to bring the pricing down, ask if there are any similar cars with bigger discounts at the moment. A friendly and informative matter will yield better results than being a pushy haggler.
When the deal looks good, strike! leasing prices can move from day to day with hundreds of brokers all trying to lease the same group of cars; if you see a truly great deal then go ahead and snap it up before it’s gone.
What is car leasing and how does it all work?
The video below should help but also feel free to Book A Call With Jim
Car Leasing Explained