You’re using words here that don’t mean what you think they mean.
Capitalized cost is a specific thing and it is never 5-20% of the value of the vehicle.
Your gross capitalized cost is the sales price of the vehicle plus any capitalized items. Your adjusted capitalized cost is the gross capitalized cost less and capitalized cost reductions. There is no such thing as an adjusted cap reduction.
Good for him. He is making a statenent that does not make any sense. On the lease, there is not an “OTD” price. That is terminology that only applies to a purchase and is a non-sensical statement in regards to a lease. There is no “OTD price” to even negotiate.
No one is bashing you. You’re being given a tool set to make you effective in trying to get the best deal.
People lease without havin any clue what they’re doing all the time. Generally the people that benefit the most are those that think they know what they’re doing, but have tons of misconceptions about how things work.
Ya, I get it. There is ALOT of information out there. I found this place because of a YT creator talking about it.
I found a place call Car Edge thatcdoes a concierge service and thats where the father, Ray, talks about OTD pricing for all deals. Not just finance.
YT, again, is where I heard someone say that with leasing you absolutely do not want to negotiate based on MSRP, but cap cost, which in his words, you ask for a reduction on almost right off the bat in negotiations. You maximize the adjusted cap reduction and that gets you the adjusted cap cost, which you want as close as possible to the residual value. That all makes sense.
Two members have already shared a template of sorts, so for that I am grateful. I understand these terms and what they mean, I just wanted to get input from others who are more recently experienced. I haven’t leased since 2016. A good amount has changed since then. This information we are discussing is far more available, but you also have way more voices of “do this, do that”, or “no, not like this, do it like that”, so it can be difficult to figure out who’s right lol
You should be negotiating a dealer discount to establish your selling price. Your pre-incentivr selling price is the msrp minus the dealer discount. Negotiating cap cost doesn’t make sense because it factors in the lease structure as much as the actual discount. To try to negotiate the cap cost (be it the gross or adjusted) leaves things ambiguous and easy to manipulate in the dealer’s favor.
As an example, let’s look at three hypothetical deals in the absence of more information. Yes, this is a trick question.
Deal 1:
MSRP $50000
Gross cap cost $48000
Adjusted cap cost $45000
Deal 2:
MSRP $50000
Gross cap cost $47000
Adjusted cap cost $43000
Deal 3:
MSRP $50000
Gross cap cost $47000
Adjusted cap cost $40000
Ya, I appreciate the feedback. I have all sorts of info on my laptop but I’m just on my phone. Im going off memory, so apologies for throwing around goofy terms that aren’t a thing.
One of the best tools is Cargurus.com. Look at how old the car is (days on lot), those cars are usually more likely to allow discounts.
My car was 200 days on lot and they accepted a 6% discount. I tried 10% with 5 dealers and got shot down. One dealer had 327 days on lot and would only discount it 1%…lol. That car is going to auction in 60 days I bet
if OP thinks users are chastising / trolling instead of educating in this thread, then he hasn’t been around in forums.
Community is providing great feedback. I would add that smaller market means less demand. You can always expand your search radius if local option is not working out. Aged inventory is what you need should focus if you are payment sensitive.
I focus my negotiation on 3 things (…actually first 2 only).
Net dealer discount (after any crammed add ons)
Money factor. set by mfr they can markup. force them to give you buy rate
Call it TT&L or misc junk fees. Acquisition fee is set by mfr, registration is by county and rest goes to dealer’s book. Some shops go crazy with this.
If they can get to your target price by giving a commensurate discount increase and the deal works better for them because they hit a step bonus because they hit their quota for back end adders, it only works in your favor.
I subscribe to Caredge and watch their vids from time to time. I think on a lease when they tell you to get an OTD price they are meaning make sure you see and understand all of the numbers. There are a lot of ways dealers can muddy the waters on price, especially on a lease.
See your MSRP, sales price of car BEFORE any rebates, rebates, taxes, fees, interest/money factor …all of that should be made clear to you before you sign.
Ya, I go to both Car Edge and Car Gurus to check that. Although I think some dealerships, especially in my area, are in denial that they have “x” amount of a vehicle sitting on their lot lol its frustrating because ive always bought loval but increasingly, it seems like I likely can go elswhere and get a better deal.
Does it even matter what all the numbers are as long as they come to my price on a one pay lease? I live in a no-sales-tax state so I don’t really see how it matters to me whether they give me a discount, find hidden incentives or whatever, as long as the total lease cost is what I want and has standard residual, and disposition fees and terms.
No it doesn’t matter. If you reach out wanting $300 monthly and $1k or less DAS based on your research and incentives you qualify for, It doesn’t matter how they get there if they do it
See, that is sort of my thought too. I am doing tons of research to know all the variables. Once you know those, you can see if a deal is lame or not. So, just saying I’m gonna wing it and whatever happens happens, is not the same as being educated on it and understanding that if “x” thing is correct then “y” can’t even be. I think that is where some of the miscommunication comes from in my post.
I’m not totally against it, but I do have a hard time grasping paying someone to get me a discount on something…can’t I just not pay someone and work on a discount? I’m in sales (not car sales), that doesn’t make me invincible to tricks by any means, but I understand this is a gimmicky game that they are working you over at. When you go in knowing that though, you are armed so much better.
My deals are always made by asking for all in pricing with first payment due at signing, specifying my incentives.
Doing what others mention here is too complicated in my opinion, not worth my time or the salesperson’s time.
I simply call the dealer, provide a stock number, say I can buy today, and ask for the best offer for my lease term and mileage. Doing this has gotten me best pricing on the forum for multiple deals, recently my $199 all in hornet deal, and my last lease, a $297 all in Giulia deal. You can use the brokers as a benchmark, but they are rarely the best you can get.
