Car Leasing 401 - Paying for that Car Lease

How Much Should I Pay for my Car Lease?

Unless the car you’re seeking to lease or buy is at an incredible price, then any other time you don’t pay the full list price of the vehicle. Almost ALL car prices are negotiable from dealerships – regardless if you’re buying or leasing the car.

The first step in knowing what to pay for the car is knowing the factory invoice price. This is the price dealers pay the manufacturer for a vehicle. To find the factory invoice price (define: dealer invoice), there are various pricing guides available online.

The difference between factory invoice and MSRP (Manufacturer's Suggested Retail Price) (define: mrsp) is the dealer's potential profit margin — and your bargaining range. Depending on the vehicle, this margin can be as little as 4% or as much as 16%, or more, of the sticker price.

*Tip: Negotiate the price with the dealer from the invoice price up, not from sticker price down.

It's possible to find even better deals than invoice price and up, in which the consumer actually pays less than invoice. Dealers are often able to do this and still make a profit due to holdbacks (define: dealer holdbacks) and factory-to-dealer rebates which are special incentive payments made to the dealer by the manufacturer to help push the sales.

Part I: Car Pricing