Lease Shopping - AA-NJ's way

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You are thinking about it in the most rational and simple way. Rest assured.

How do you know you’re getting a good deal? You just compare the Monthly Payment and total down payment from multiple sellers in your region. Get quotes from multiple sellers. Compare the total payments.

What do you do when you rent a car from Enterprise? You compare the total cost to rent between a few different rental agencies, and a few different car classes. You’re not trying to calculate exactly how much Enterprise paid for the car from the manufacturer, the total amount of Fleet incentives, or the cost of the money Enterprise is using to front the car purchases.

Even if you knew that information, it doesn’t help you at all, when it comes to finding the cheapest car rental price.

When I rent a car, because I’m in the business, I literally do know how much Enterprise pays for an Elantra rental, and all the costs that go into it. This gives me absolutely zero leverage when I’m booking my reservation for a compact car at an airport rental location. I just compare a few rental car sites, put in my Costco, AAA, and USAA numbers, and go with whoever gives me the lowest payment. I have the insider information, but using it will just cost mental gymnastics, without giving me any savings, not even $1 off my rental.

Whether you’re renting a car for a few days (daily rental) or a few years (closed-end lease), you just need to compare “how much” and “how long” between different cars and sellers to do your comparison shopping.

You could say “well, if I know the MF is marked up, I could push to lower it, and if I know the selling price is too high, I can push for more dealer discount” - but, honestly, this is just an abstraction layer to negotiating your bottom-line payments. If the price is too high, ask for a lower price. If the dealer doesn’t want to go lower, they won’t, regardless of if you know how they calculated their number.

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Andy, are you actually serious with this post?

The name of this website is literally leasehackr - as in work the variables to find the best possible deal

If a customer is educated about the variables in a lease such as the money factor, applicable lease cash, rebates and the residual, they can make an informed decision based on the structure of the deal.

Walking into a dealer or negotiating over email and just looking at the lowest price offers you no idea of the actual structure you’re looking at. You could get a $200 payment from one store and $500 from the other and you still have no idea what you’re looking at because you haven’t broken the deal down.

There is a dealership on every corner and not all of them are asking for sticker.

Telling someone to negotiate the lowest price makes exactly zero sense. If somebody walks into a deal and they choose a 48-month lease that buries them as opposed to a 36 which offers them equity - should they have gone for the lowest price?

We are actually today, seeing the fruit from working your own deals in a structured way as most of lease hackers regulars are cashing out their vehicle for substantial equity.

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Completely serious. Getting a complete breakdown is one way to shop, but it’s not the only way to get a great deal, and it can be tedious to have more numbers flying around than necessary.

I said, “how much” for “how long” is what matters.
You need to know the total term, and the total cost.
Obviously 36 vs 42 months is going to be apples to oranges, but I never said to compare a 36 month to a 42 month.

You have zero disagreement from me that “lowest price” is not a valid piece of information without also knowing how long the lease is for.

I can also vouch for hundreds of people that have equity in their lease buyouts that negotiated only based on payment/term, and did not know the MF/RF/discount/spread when they signed their lease. These people are seeing the same fruit, but had to put in less work/time.

How do you get the best deal when you rent a car from Avis/Enterprise/Budget/Sixt/Alamo/etc?

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You don’t lease cars from those services and you can’t control the variables.

You can literally shop any dealer across the country and change the structure from every single store.

Those people you know walked into their equity because the market spiked whereas the people who worked their deal are cashing out for higher numbers.

I cashed out a 1500 Ram for $16,000.

If I had just looked at the payment I got maybe a third of that.

You’re comparing apples and oranges.

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From a daily rental, you pay a fixed amount of money to use the car, for a fixed amount of time or miles, and give it back.
From a closed-end lease, you pay a fixed amount of money to use the car, for a fixed amount of time or miles, and give it back.

I do agree that, in the (recent) past, there was an additional “Hack” you could do, trying to arbitrage your buyout. I’ve done it, you’ve done it, other forum members here have done it.

But, in part to people posting on this site that they’ve been doing it, the auto lenders that are also on this site, have noticed, and have aggressively been closing out third party buyouts.

It stands to reason that the leasing banks have learned their lesson and will continue to tighten the restrictions around closed-end leases, such that you have less options to profit at their expense at the end of the lease. It’s not hard to see that all these leasing banks have an economic incentive to treat your lease contract more like how Enterprise treats a daily rental contract - which is you give the car back at the end, and you are deprived the equity opportunity.

There are leases coming to end around-now, and people are cashing them out. My advice is more future-thinking. In a world where none of the leasing banks will no longer let you turn a profit on your closed-end leasethe specific ratio between the levers (MF/RV/dealer discount/incentives) will become less important than the grand total of “how much, for how long”.

Tl~dr: I agree with you as long as it’s possible to flip your lease for a profit at the end. If the lenders contractually eliminate that option, the parallel between your lease lender and Enterprise daily rental is more valid.

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Why do you think going and asking a handful of local dealers what they want you to pay is in any way representational of the best deal you can actually get?

Let’s change this conversation around slightly… you’re a broker. How many of the deals that you’re offering are a result of going to a dealer and just saying “hey, what would you let me sell this to others for?” without any sort of back and forth to negotiate terms or baselined data to establish if that deal is any good?

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I do a ton of back-and-forth, but I compare bottom line DAS and Monthly numbers between dealers. I make offers using DAS and Monthly numbers. I graph historical prices, I look at market demand, and I make offers.

It does often start by just asking a few dealers for their price, and then I suggest mine. I know where the dealer cost is, and where their profit line is, but it really doesn’t help me.

Cars sell for market-based prices, so I just try to find the monthly payments that are at market-price and go from there.

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So you utilize market data to establish a target price, that you normalize for the specific situation, and then make an offer to the dealer based on those variables.

That is exactly what we talk about doing here and is the absolutely antithesis to what you’re suggesting of just going and asking some local dealers how much they want to charge and taking the best price.

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Yes, this is the approach, and it is most successfully accomplished using only Term, DAS, and Monthly as numerical values. You don’t need any further breakdown to be successful at this.

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How do you effectively normalize market data without knowing the variables?

I agree that one can effectively negotiate a deal based only on term/das/monthly, but only after they baseline the data given the relevant information.

Do you need to know what mf the dealer is actually charging in your deal? Absolutely not. Do you need to know what buy rate is so that you can properly establish a target deal to make that offer? Absolutely. If you remain ignorant to the the details of the deals, you have no effective means of efficiently normalizing data and if you’re trying to establish target prices off of non-normalized data, you’re wasting your time with nonsense.

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My drone footage of @mllcb42 is showing him hitting the heavy bag right now. I think he is about to spontaneously combust.

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So the bag wins?

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Or you can do what I do, and just make the same offer to 20 different Hyundai dealers in New Jersey. They all have the same tax rate, dmv fees, buy rate, etc. None of the true cost on those variables are different in my market, so by comparing the bottom-line, it is an effective comparison putting all 20 dealers on a level playing field.

You can absolutely get the baseline without ever needing more information, as long as there’s enough competing dealerships selling the same cars.

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And the fruits of all of this labor = elantras at a few thou over list?? Sounds about right.

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I’m not interested in buying a car for what the dealers want to sell it to me for. I’m interested in utilizing actual sales data to baseline a deal off of what vehicles are actually selling for. That requires looking at data from individuals with different situations than I, requiring the data to be normalized.

Market value here is important, and that is based on the actual transactions, not what dealers want to sell for.

If there was a method for effectively normalizing actual completed transactions without breaking out the details, then sure, you could just look at the monthly/das and be on your way. That doesn’t exist(at least not freely available to the public), so the only useful data available requires some amount of digestion.

In my experience the prices that I’m able to get to by actually putting the work in is always significantly cheaper than the prices that dealers are willing to offer if I just ask for the best price… and why wouldn’t it be?

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This is really not intended to be an inflammatory question, but it’s very relevant: Have you tried to buy or lease a car in the past 3 months? Does your experience cover buying/leasing cars during a global inventory shortage impacting all makes/models of car?

Second question: During a period where the average car sale price is over sticker, do you really think people will be proud enough of paying over-sticker to post their data points here? Is it possible that people only post the “low” data points, which are so few and far between, that they don’t represent the current market conditions?

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It’s been about 3.5 months since I signed my last lease, which I do recognize is a different market from today, although was impacted by some of the crap going on. I have also shopped for a car as recently as 2 months ago, and did not have any issues with gathering useful data, albeit less available.

Yes, data points are more limited and are at lesser discounts, but that doesn’t justify throwing in the towel.

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You don’t have access to a reliable enough source of this data for it to be statistically sound. The dealers actually do. They have data that shows the cars are selling for way-over-sticker.

If you take all of your techniques that worked 3.5+ months ago, and try now, you will fail miserably. Dealers will hang up on you. Dealers will not respond to your offers and just ghost you out.

My point is, the approach that has traditionally “worked” on LeaseHackr only worked in a buyer’s market, when car supply exceeded demand, like it pretty much has unilaterally for 30+ years.

Now that we’re in a seller’s market, the same “tricks” don’t work, simply because the dealers actually want to make more money, and will no longer entertain any strategy that leads to them making significantly less on the car.

I am grateful for the opportunity to operate in both types of markets, because it has helped me find an approach that is economically sound, and tested against both types of market conditions.

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I leased an ioniq ev 2 days ago. It is the 6th ev I have leased this year, third from this dealer. They reached out to me and offered me the car for 265/month with 1st due at signing. I immeadiatley ran the numbers and saw they were only giving a 4% discount. I asked for 10% they gave 7% and I e signed same day. I would not have known the dealer discount without being able to calculate the lease myselft. NO ONE should lease a car without being able to calcualte a lease unless they don’t care about getting hosed. Even in this market you can still get a decent deal if you know what your doing.

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Do they have more in stock? Because I have a whole list of people that would love that deal!