How Great Car Lease Deals are Made

best car lease dealsWe often remind our readers that finding promotional leases from car manufacturers is the way to get the best car deals, better than any deal customers could negotiate for themselves.

The fundamental reason this is true is that when a customer negotiates a car lease with a dealer, the dealer can only negotiate one thing — price — the price that the lease will be based on.  He cannot, and is not authorized to, negotiate money factor (finance rate) or lease-end residual value, the other important factors that determine lease payment amount.

[Many novice car consumers try to negotiate monthly payments with dealers, which is the worst possible way to get a new-car deal and it gives the dealer all the advantage — including creating an agreeable payment that is based on a price that is higher than MSRP. Dealers love customers who only know to negotiate payments.]

A car manufacturer however can, through his finance company affiliate, not only discount vehicle lease price but also reduce money factor and boost residual value — which creates low monthly payments. This is how great lease deals are made — without any need for awkward and stressful haggling with dealers.

In fact, manufacturer-sponsored car lease deals are the least expensive way to drive a brand new car, including rebates, bonuses, and even 0% APR loan rates.

Let’s take a look at how it works.

For our example, we’ll use the 2013 Infiniti G37 AWD Coupe which we’ve identified as one of the best lease deals available at the time of this writing (see Outstanding Infiniti Lease Deals ). The current lease offer for this vehicle from Infiniti is $379/month, 24 months, $2999 due at signing ($2620 down payment plus $379 first month’s payment). scores this deal at a very high 140, which is rated Outstanding.

[You can evaluate and score your own car lease deals at]

Promotional lease
To create this special lease deal, Infiniti has discounted the price by $2037 (MSRP $45,595 minus Cap Cost $43,558). They have also set the lease-end residual at $33,284, which is an incredible 73% of MSRP. A normal residual percentage for this car would be about 58%. The money factor is a super-low .00041, which is equivalent to 0.98% APR finance rate. At $379/month, this is a great deal!

Normal lease
Now let’s look at what a “normal” non-promotional lease for this vehicle would be. We will assumed that the lease is based on full MSRP (no price discount), same down payment of $2620, a normal residual percentage of 58% , and a national-average new-car interest rate of 3.80% (.00160 money factor). The resulting monthly payment would be $830.10/month.

Even if we assume that we could negotiate the full $2037 price discount (very unlikely), the payment would still be a very high $741.97/month.

Lease versus buy
Let’s compare the special lease above with buying the same car with a 24 month loan, full MSRP of $45,595, same down payment of $2620, and a normal 3.80% APR loan rate. With these factors, the monthly loan payment would be a whopping $1862.36/month.

Even if we assume we could get the full $2037 price discount (unlikely), and get a slightly better loan rate of 2.9% APR, and spread out the purchase loan term to 48 months, our monthly payment is still $904.33/month.

Further, if Infiniti were to offer a 0% APR loan rate, which they sometimes do, the purchase loan payment would be $852.86/month — compared to $379/month lease payment.

For 2013 Infiniti G37 Coupe:

- Normal no-discount purchase loan 24 months – $1862/month
- Discounted price purchase loan 48 months – $904/month
- 0% APR purchase loan 48 months – $853/month

- Normal lease – 24 months – $830/month
- Promotional lease – 24 months – $379/month


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