Why do dealers offer higher discounts for purchases compared to leases?
I’ve often encountered situations where a high dealer discount is advertised, but when I inquire about leasing, the discount is significantly lower. This has happened to me multiple times, resulting in wasted time and frustration.
One reason I can think of: They can potentially earn more if you finance through them from the interest, though that’s not guaranteed since you could pay in cash or finance externally.
Furthermore, from my understanding, dealer discounts should be combinable with manufacturer incentives since they come from different sources.
Can anyone, especially dealers, explain why this discrepancy exists?
Usually, it’s because they are combining the actual discount and the incentives in the number they’re giving you and there are more incentives for them to combine on a purchase for those vehicles.
Just another reason why asking for quotes is a waste of time.
It can go both ways. Sometimes rebates/incentives are higher for leases, sometimes for purchase and vice versa… or sometimes they can be the same.
In your case, there is probably some manufacturer cash for purchases that doesn’t exist for leases, but they’re presenting it as a dealer discount to make it seem like a better deal.
Just another reason why asking for quotes is a waste of time.
So what do you suggest I change in my approach? In my experience, securing a great lease deal often relies on the dealer offering a pre-incentive discount. Dealers tend to be more open to removing add-ons and adjusting money factors to buy rate. So, I typically focus on contacting dealers who advertise significant discounts. How can I determine the lease discount in advance to avoid reaching out to dealers who might reduce the discount and provide an underwhelming lease quote? I used to rely on those online calculators dealership websites have but a bunch of dealers just claim that thing is broken.
CASH
FINANCE
LEASE
(mickey mouse buying you the car)
None of that matters
That being said some incentives such as the 7500 ev bonus on PHEVs and EVs for volvo are on leases only. The selling price will be the same but the applicable rebates will be higher on the lease.
Yeah I agree that manufacturer incentives can vary.
The selling price will be the same…
This is not honored the same across a purchase and lease (“dealership-name price” aka the selling price is 10% off on website but it only applies to a purchase, and when I lease the selling price is only 1-2% off) . That’s what I am trying to know in advance so I don’t waste mine or a salesman’s time on a deal that will not go through.
Absolutely- why the suggestions you will get here are move to a strategy of making offers
determine what incentives you qualify for in the current month, verify with Rate Finder or Edmunds
determine what the pre-incentive discount should be
plug it all into calculator and verify your expectations and what’s possible are aligned before you contact dealers
Some here suggest making an offer on a lease that breaks down expected discount and incentives, some recommend just DAS and expected payment - it’s all preference and there are a million posts on approach if you search.
If a dealer is telling you a lease is more than financing, and it’s not due to incentives that are excluded from leases (eg most EVs), you need a different dealership.
