You have to remember what market we are in right now. These days, the ball is really in their court, not yours.
We have a Honda dealership near where I am, that about three weeks ago had 80 some CR-V. They are a one price, no negotiation store, and everything was priced at MSRP. About a week ago, that same store had no CR-V’s. These days Honda will have no problem selling vehicles at MSRP.
Thank you for the quick response.
So you wouldn’t be against putting money down? I have seen some forums against any money down vs some that advocated for less than 20% MSRP. Interested in what your thoughts are.
I wanted 12 miles, 0 down, 0 drive off with a monthly payment of 1% MSRP.
Maybe I’m being naive here and in denial of the market currently.
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.
Thank you, this is most helpful.
I see your point on using 1% of msrp isn’t helpful - Thank you for the explanation.
I did steps 1-5, but still a lot to learn. The different terms and different MF/RV is new information to me - thank you for the suggestion. Will try again! (as you’ve mentioned with a solid foundation)
This is a different dealer and a different trim.
The deal that I asked about yesterday (which I received a ton of help from you) was sold this morning haha
My target price was 2% of MSRP, but at this point, I’m not sure if it’s possible.
If you run that to ground, using the lease programs that apply to you, what does the lease end up looking like?
On a totally personal pet peeve note, I’d tell this dealer to pound sand just for trying that $30 payment spread nonsense where they say “well, we’ll just have to see what it comes to!” and play psychological games with you to get you mentally committed to the lower number on the possibilities and then come back a few dollars under the highest and say “look, we got a bit off… we’re right in that range!” as if they don’t already know the price.
Got it. I’ll tell the dealer to pound sand haha
I believe the MF is 0.0015.
If I do 2% of MSRP,
the total lease cost is $14,021 instead of $14,674
the monthly payment is $384 instead of $402
