There are reasons for and against putting money down. Many say not to put any down because of the risk of the vehicle being totalled and not getting it back. That’s valid, although low. The cost of protecting yourself against that chance depends on the mf, etc. I personally wouldn’t subscribe to absolutes. Most important is to not use a big cap cost reduction to make a payment “feel” OK. That’s a great way to overpay.
Basing a target payment off of 1% of msrp isn’t a useful strategy. There are vehicles where That’s a great deal and vehicles where that is a horrible deal. You’re far better off establishing your target price off of the current market conditions by looking at shared deals and broker listings and then applying the lease terms as they apply to you.
We always recommend the following method before you ever contact a dealership. If you do all of the work up front, you’ll have a stress free dealer experience and set yourself for success.
- Read Leasing 101 (EDITORIAL | LEASEHACKR) to understand how to calculate a lease payment and the variables. Monthly payment is an output, not an input!! While you’re at it, be sure to watch the LH video (How to Use Leasehackr - YouTube) to brush up on how to most efficiently use the resources here.
- Pick a specific vehicle that you want to target
- Gather the current MF, RV and incentives from the LH Calculator - Lease Program Query or Edmunds forums for your zip code
- Research the LH marketplace and other deals that have been made recently on your vehicle - what was their pre-incentive discount? How did their lease terms differ?
- Plug your numbers into the LH calculator (CALCULATOR | LEASEHACKR), and use a pre-incentive discount similar to what you have seen
- Create a target deal, this is what you’re trying to negotiate to. You can try different terms, selling price discount, etc. and see how your monthly payment is affected. It is also possible that different trims of your vehicle may have different MF and RV (i.e. this is very common with GM), so make sure that you look into that. Come up with a set of inputs that give you the output that you want - your desired monthly payment.
With a target price determined, you now have a deal to pursue and compare dealer offers against. More importantly, you have a solid foundation to work from.