Edit for clarity on this post - this is not a good deal and I did not negotiate. I got worn down by a dealership before I really started and took a hit that I can absorb. I will do better next time, and am sharing from the perspective of someone who has never really thought about leasing before and went into a dealership with some time pressure. By my calculation, a fair lease on this car in CA, for 24/10 would be effectively $430/month, and a ‘deal’ would be less than that.
This forum was very helpful to me because I understood more than I otherwise would have about what was going well and what was going badly when I was ‘negotiating’ my deal. Here are the details:
24/10k, $6k DAS and $250/month (effectively $489/month), terms in calculator
In CA, I will be able to extend to 30 months, bringing effective cost to $391/month
I learned to use the calculator following this explanation. For a good experience of both the calculator and talking finances with the dealership, you should go to this random edmunds forum and create an account so that you can post with your zip code to request the moderator to report the MF, residual and lease cash that you should expect.
In my case, I found that according to Edmund, the 2025 Kia Niro EV Wave for 24/10 and 36/10 in 95110, should be:
.00095 MF (2.28% APR) and 63% RV; $9500 lease cash
.00088 MF (2.11% APR) and 57% RV; $8500 lease cash
The deal I signed uses a money factor of 0.00119, corresponding to an APR of 2.86%. This is a bit worse than what I saw on Edmunds. Over the lifetime of the lease, this translates to a loss for me of about $400. I’m not sure why the dealer used the higher money factor, but I was definitely worn down by the process enough that I stopped pushing. Next time!
I did opt-in to the dealer’s ‘Excess Wear and Tear.’ This is my first time leasing and I’ll see if it ends up being worth it. With kids and dogs likely to tear up the leather seats, it seemed plausible.
Lessons from the ‘negotiations’ I didn’t see a place where the experience of negotiation was much discussed on this forum. I have 4 strong impressions that will help me the next time I am doing this.
- They don’t want you to leave. The process of getting lease numbers takes an unexpectedly long time, and the salesman will apply an uncomfortable amount of pressure to prevent you from leaving. In total, I spent 5 hours across 2 days in the dealership after we chose the car.
- They don’t want you to leave with information about the lease. They took a very long time to get me a lease document, and they want you to have verbally agreed to vague numbers prior to going to the ‘finance manager.’
- The first step is a trap. This is when a salesperson mentions numbers - mine wrote the drive-off + monthly payment suggestion on a piece of paper. It is not a detailed lease agreement, instead they hope you will agree to the numbers so they can draft a contract for you to sign. At this stage I politely requested smaller numbers and got them. Pushing harder after the initial time didn’t help me. I was aiming for effectively $400/month and they started with effectively $550. I got down to effectively $500 and more or less stalled there.
- Neither the salesperson nor the finance person seems particularly knowledgable. The finance person is just plugging information into his computer and it is spitting out the result. It’s hard to negotiate with that beyond saying ‘please,’ and I think most negotiation would center around finding errors in how they are filling out their forms. In my experience, neither of them explained anything useful through the process.
Things I felt I handled well:
- The best thing I did was leaving the first time, after getting the information about what they thought the lease would look like. This first departure was by far the hardest part - the salesperson applied a lot of pressure and my wife and I nearly fell into the sunken cost fallacy, because we had already spent so much time there and wanted to get it over with.
- Once I had their best offer in hand, I called other dealers to see what a lease with them might look like.
- I did research on these forums to model out the lease terms in the calculator, I brought the filled-in calculator to the meeting and also printed out this guide to reading the lease contract and brought it with me.
- I got the Edmunds MF and cash before going to talk with the finance manager
- I successfully leased my first car, and got an EV before any changes in rebates!
- I verified that I can extend my lease by 6 months at the end of the 24 months, bringing my effective monthly rate down by about $50/month
Things that could have gone better:
- Ideally I’d have gone in earlier in the day the first time, waited the 3+ hours to speak to the finance manager, gotten a physical copy of the full lease agreement, and left with it. Since we arrived later in the day and were there through dinner time, we left with an understanding of the costs that was enough for me to remember and use the calculator.
- It might have been better to go into the other dealerships rather than just calling them (but the calls were not promising).
- I did not verify whether this dealership would do a single-pay lease prior to going in. It turned out that they did not (the resulting lower money factor would have saved me $600 over the lease term).
- I did not ask about putting down security deposits, which may have lowered the overall cost.
- I did not push the finance person on the difference between the Edmund’s money factor and the one in my lease. When I was sitting with him I got a bit confused on how to calculate the monthly payment given the money factor, and this distracted me from pushing about the money factor he was using. The difference cost me $400 over the lease term.
- In case you’re curious, to find the Money Factor, you first find the monthly rent by taking the [Rent Charge]/[lease term] and then divide that by the [Residual+Adjusted Capitalized Cost]. My mistake was trying to use the full monthly payment, rather than the monthly rent.
What do you think? Anything I missed?
Edit: Update from user comments
- The dealer verbally confirmed a 3.5% price reduction, but the ‘negotiated price’ in the lease corresponded to a 1% price reduction. I did not understand how to read the lease well enough and it cost me $1000.
- Negotiate remotely and probably use a broker. Come in with prices you want, you should be the one making the offers and expect a yes/no response.
- I should have better leveraged Leasehackr community and tools, checking the lease terms here before signing, and posting to find NorCal brokers.
Thanks again to those who provided helpful comments.
