So, you’re looking to lease a car. You’ve probably been searching online at some leasing companies and have had a look at their pricing. And maybe you’re wondering if these prices are set in stone, or if there is room for manoeuvre.
Are lease prices negotiable?
In this article, we look at how companies come up with their lease prices, whether they are negotiable, and some top tips for negotiating.
Can I negotiate my lease price?
Yes you can. However, there are some exceptions. Firstly, we’re going to explain a bit about how companies get their lease prices.
How much discount will I get if I negotiate with a dealership?
In many dealerships there are two departments; Fleet and Retail. When you walk into a dealership, you are talking to the retail team. This is the department that makes the money for the dealership.
This department has the flexibility of discounting the vehicle and they will be able to enable this when you negotiate the price. Normally, regarding the finance the vehicle, you will be taken to a Business Manager. It is their job to sort out the credit for you, and in turn make money for the dealership out of the finance deal.
The other department is the Fleet Department. These guys are normally hidden away in an office and are not customer facing. They only deal with large and medium sized businesses who buy multiple vehicles and normally only have access to a couple of finance houses.
How much discount will I get if I negotiate with a broker?
An established broker with buying power will buy the vehicle from the fleet department with pre-agreed maximum discounts. The broker will then pick the best finance house. This could either be the manufacturer’s finance house or another one in their own arsenal. The more established the broker, the better they are at this.
So, dealing with a broker to negotiate on price is already slightly different to a dealership. The negotiation on the buying price is already done, it’s all down to the best finance house and service.
A broker or dealership will get a price from various finance houses on whichever vehicle you are interested in. This is the base price. This will include all discounts the dealership or broker get from the finance house, and any the manufacturer has to offer. So, for example, a VW Golf for £7,000 over two years. That price will not change.
The broker needs to make money somehow. So, they will upsell the monthly rentals. Let’s say this is by £35 a month. This £35 extra a month over two years will equate to £800. The profit margin is therefore £800, and that’s your negotiation.
So, if you negotiate £10 off the monthly payments, then that could be a saving of £240 overall.
However, there is another way. How we work at OSV (we can’t speak for other brokers, obviously) is that we will talk to you about your requirements. We’ll ask about your budget and try and find the best car for your needs. If there is a car that you like the look of, and its base price is your exact budget or just over, then we will talk to our network of fleet dealerships. As an established broker, we have relationships with big discounting dealers and highly competitive finance houses. Our job is to combine the two to get you the best price. And we will do the negotiations for you.
However, whether they can or not will depend on where they are in regards to their monthly, quarterly and yearly targets, and which cars they have in stock.
How not to negotiate lease price
One of the biggest mistakes some people make is that they shop themselves out of the market. This isn’t just a bit no-no for us, it’s for everyone. There could be someone who will go to someone to get a quote, and use that quote to get a quote from someone else, and use that quote to get a quote, to use THAT quote to…you get the idea.
This is a bad idea. Brokers and dealerships do know when someone is shopping around. And they won’t do business with someone that does this excessively as it’s not good business.
How to negotiate lease price
So, you know how not to negotiate lease price, we’re now going to give you advice on how to negotiate with us. Seriously.
We are completely customer focused. And with this in mind, if we are completely committed to you then we want you to be completely committed to us. If you show that you like how our company works, you like what we do and commit yourself to us, then we will work hard to get you the lowest price possible.
If you come to us after getting a quote somewhere else then we will ask for a copy of this before getting quotes ourselves. This is because we will normally be able to tell straight away how it is likely to be structured. If we can beat it, then we will ask you to commit to us so we can negotiate for you.
However, despite our vast experience and extensive list of contacts there may be a time when someone has simply found something we have not. In which case, we will tell you to run with it. Go and get that deal before someone else does.
Ultimately, we want the best deal for you. And we will work as hard as possible to do this for you. If you commit to us then we’ll commit to getting you the best price you can. So yes, you can negotiate lease prices. Of course, this is for us, and we can’t speak for every broker or dealership. The worst thing you can do is to shop yourself out of the market, there are better ways to negotiate the price of your lease car.