Amount that manufacturers offer as an incentive to buy or lease their car. The rebate option may also be called “cash back”.
Money that manufacturers offer dealers to offset expenses.
A fee that the bank charges as part of your car transaction.
The number of months or years that the loan will last.
Amount of money below invoice dealers have. It is typically used to cover dealer expenses. Holdback can be negotiated depending on the dealer and you’ll find many dealers offering you prices below invoice through our channels.
Invoice Price is a reference point for what dealers pay for their cars. Dealers true cost is usually 1%-3% below invoice depending on the Brand.
Banks offer lease terms for a variety of months and years. The average term is 3 years. I highly recommend that you avoid leasing for longer than a 4 year term. The main factor you should consider when choosing a lease term is: How long is the bumper to bumper portion of the factory warranty compared to how many miles you will drive per year? I don’t recommend leasing for a term that will have you exposed out of the factory warranty period. Quite often you will see lease term for 39 months or 42 months. The reason for this is for the banks to show lower payments to compete with other manufacturers. Another reason is that the manufacturers like to time when you get out of your lease. i.e.: when a new model is coming out. Another important factor is the cost of renewing your annual registration. If you are in a state with high registration fees, then you may consider getting a quote for the 36 month term to compare with the 39 or 42. Never fall for when a sales person tells you that he can get you out of a longer lease early with no penalty. There typically is a penalty, sometimes it is hidden.
The lease rate (also called “money factor”) is used by the banks to determine the amount of interest you will pay over your lease term. It is very important to negotiate this part of the lease. Dealers can make a hidden profit by marking up the lease rate. This is important because the dealer can show you a great price on the car, then make a large profit by marking up the rate. Uneducated buyers fall for this all the time and it can be a costly mistake that can easily be avoided with my techniques.
Miles per Year
When you lease a car, a key factor for the terms of the lease are the miles that are allowed to be driven during the lease term. The first thing I want you to know is that the amount of miles you choose for a lease does not have to be negotiated. The average mileage allowance is typically 12,000 and 15,000 miles per year. I recommend that you chose a mileage amount that is slightly higher that what you expect to drive because I don’t want you constantly looking at the odometer every time you drive your car worrying that you’ll go over the miles.
Minimum Amount to Start the Lease
All lease banks prefer that you start the lease with what’s called “minimum drive off fees”. That consists of the first payment, license, dealer and bank fees. If you are on a 36 month lease, you would only have 35 remaining payments after paying your first payment included in the Drive Off.
Minimum Drive Off Fees
All lease banks prefer that you start the lease with what’s called “minimum drive off fees”. That consists of the first payment, license, dealer and bank fees. If you are on a 36 month lease, you would only have 35 remaining payments after paying your first payment included in the Drive Off fees.
see Lease Rate.
Manufacturers Suggested Retail Price (MSRP)
The price for which the company that produces a vehicle recommends that it be sold in dealerships. It is very important to use this for comparison between dealer quotes to make sure you are comparing the same cars and equipment.
The Residual is value of your vehicle, and your purchase option at the end of the lease (excluding bank fees and taxes.) It is a key component of how the monthly payment on the lease is determined and is based on what the bank estimates the car will be worth at the end of the lease term. The residual amount varies based on the length of the lease and how many miles will be driven during the lease term. The residual is calculated as a percentage of the RETAIL price of the car (MSRP). We need to know this percentage to compare each dealer’s lease quote. The main thing I want you to know is that the residual value is not negotiable so you don’t have to worry about negotiating it. The main reason I have the residual on the DealTracker is that it is a main factor a professional negotiator uses to make sure that the lease quotes are correct. Discrepancies help us to catch mistakes made by the dealer whether intentional or not. The fewer miles on the car at the end of the lease, the higher the residual.
Manufacturers sometimes offer special financing. A special interest rate is usually in lieu of a cash rebate. It’s usually either/or. If you have a choice between a cash rebate or special financing, you must watch the video Cash rebate VS Special financing.
Total Payment Including Tax
Make sure the dealer confirms that the lease payment includes sales tax. Some dealers quote payments without tax.
A guarantee by a seller to a buyer that if a product requires repair or remedy of a problem within a certain period after the car purchase, the seller will repair the problem at no cost to the buyer. There are many details to the car warranty, including tire warranties. Learn more by watching the videos!
Edmunds True Market Value®
Here you can research the car you are interested in to see what people are paying for that car in your area now. These values are based on actual sales of other cars of its kind in your region. Link: http://www.edmunds.com/tmv.html
Kelley Blue Book
Another great resource for researching used car values, the “Blue Book” is the gold-standard in the industry for evaluating used car prices. Great for determining the value of your trade-in. Link: www.kbb.com
Also for checking out what people are paying for the car you are interested in. They show you a range of prices that have recently been paid for your car. Their prices typically include rebates. Link: www.truecar.com