10 Lease Hacks for Your Next Car Lease

‘Hacking’ your lease doesn’t involve underhanded tricks or privileged insider information. Instead, lease hacking simply refers to approaching leasing a vehicle with prior knowledge to help you obtain a better deal. It’s more like ‘informed car shopping’ at its core. 

Lease hacking has evolved over the years to respond to various market trends. Previously, you could lease a vehicle for far less than you would pay to finance the car. Some lessees even profited from their leases if they could find a suitable deal. 

However, recent years have shown that leasing can cost more than financing a vehicle. While the perks of temporary ownership still apply, leasing doesn’t make sense for as many people as it used to. That’s where lease hacking originated. 

Hacking a lease starts with research. The more you know about leasing and the specific car(s) you want to lease, the better you’ll be in negotiations. Then, it’s a matter of timing and finding the right deal. When you know how to make the numbers work, you can successfully hack your lease. 

As daunting a task as all that sounds, your best bet is to begin with knowledge. The more you know about how the leasing game works, the better you can develop your strategy. The list below includes several lease hacks for car leasing like a pro. 

1. Understand the elements of your lease 

As with any legally-binding document, you should know what you’re signing when you agree to a lease deal. Below are standard lease terms you should be mindful of: 

• Capitalized cost: This number represents the agreed-upon value of the leased car, plus an acquisition and destination fee, if applicable. The lower the capitalized (cap) cost, the lower your monthly payments. 
• Down payment: These payments are often DAS or ‘due at signing.’ However, you should reconsider submitting a down payment, as those funds are not insured as part of the vehicle. They are considered a capitalized cost and go to the insurance company if your lease gets totaled or stolen. 
• Fees: These include a security deposit and fees for acquisition, disposition, assignment, purchase, early termination, and excess mileage. 
• Capitalized cost reduction: Any incentives or rebates show up here, including your down payment or trade-in. These entries reduce your cap cost and your monthly payments. 
• Residual value: The residual value represents what you would pay if you bought the car once the lease terms are up. The residual value and depreciation go hand-in-hand. The higher this value, the lower your monthly payments. 
• Money factor: Otherwise known as the interest rate for your lease, the money factor is expressed as a decimal rather than a percentage. To convert it to a percentage, simply multiply it by 2,400. Learn more about how to increase your credit score to lease a car and lower your money factor for a better deal.

You can also use this fine example of a lease contract from LeaseHackr.com. Study this contract before you sign one yourself, and you can potentially save hundreds of dollars over the life of your lease.    

2. Negotiate your trade-in and lease separately 

Dealerships make it convenient to trade in your old car and lease a new(er) one, sometimes to your disadvantage. If you plan on trading in your vehicle, negotiate that deal separately—potentially at another dealership altogether.  

3. Shop lease deals and use them in negotiations 

Price comparison is critical to gauging the value of your lease. Check for any manufacturer deals or rebates designed specifically for leased vehicles. You may also get a discount if you belong to groups like AARP or USAA. 

Learning how to negotiate a car lease doesn’t always require a forceful approach. If you can present your case and allow a dealership the chance to earn your business, you both can walk away satisfied.   

4. Focus on lease costs the dealer can control  

Dealerships often contract with financial entities that set specific lease terms in stone. No matter how convincing your case, some terms aren’t negotiable. Turn your attention instead to fees the dealership sets, from preparatory fees to add-ons such as paint sealants, extended warranties, and window etching. 

5. Aim for the 1% test 

The going rule of thumb is to find a lease deal that totals 1% of the vehicle's purchase price. For example, a $30,000 car’s best lease deal would be 1% of that, which is a $300 monthly payment. Cars valued at $40,000 would have an excellent lease deal of $400, and so on. 

Like any rule of thumb, you should take the 1% test with a grain of salt. If the lease deal is competitive and makes sense for your budget, don’t bend it out of shape to fit this arbitrary rule. 

6. Check your lease for third-party buyout restrictions 

One of the best questions to ask before leasing a car is, ‘Are there any third-party buyout restrictions?’ If in place, these restrictions prevent you from selling your leased vehicle to another dealer or places like CarMax and Carvana, typically to profit from the deal. 

Previously, you could drive fewer miles than was stipulated in your lease contract and sell your lease for a profit. However, many brands have since restricted third-party buyouts. 

7. Scrutinize any additional costs listed in the lease  

Once you’ve negotiated the price of the vehicle, it can seem like you’re free and clear. However, dealerships often tack on unnecessary additional costs, listed as ‘Additional Dealer Profits’ or ADP. Clarify these costs in writing before you proceed with the lease.  

8. Verify any mileage listed in the lease  

When you lease a car, you’re only allowed so many miles for the lease. If the odometer starts at zero (which it never does, even for brand-new vehicles sitting on the lot), then you get the complete mileage count on the lease. If you don’t account for the miles on the car within the lease paperwork, you’re losing mileage before you’ve even driven off the lot.  

9. Preload any extra miles you need

EExcessmileage on a leased vehicle is like any insurance premium: you pay for it so you’re not held liable for costs totaling thousands of dollars. If you think you’ll exceed the mileage limits allowed per your lease, paying ahead of time is cheaper than covering any penalties you may incur.  

10. Take care of minor repairs yourself 

If you’ve ever rented a car, you know you’re not liable for any dents, dings, or other damage smaller than a credit card. The same goes for a lease. However, if damage needs repairing, it’s better to take care of it yourself than pay the repair fee and dealer markup. 

Popular repairs you should do yourself include replacing your windshield or tires and addressing cosmetic damage. Automotive detail companies typically charge a few hundred dollars for interior and exterior deep cleaning. Avoid wear-and-tear insurance, and you’ll still save money if the third-party detail company charges you extra for things like pet hair or scratches.  

Car lease hacking can help you get a better deal on your lease. But what are some hacks you can use after your lease is up?  

Lease another car

Now that you know how to lease a car and what mistakes to avoid, you can enter another lease as a more experienced lessee. Learn more about leasing a vehicle and your options to find a suitable solution.  

Purchase your leased vehicle

Car lease hacking takes a lot of time, research, and patience. If you’re not ready for another lease, you can look into purchasing your leased vehicle or another one like it. You can use some of the same research you did for your lease to get started. 

Subscribe to a car with FINN

If you’re looking for a balance between leasing and buying, a subscription service like FINN can be the best of both worlds. FINN offers a short-term car lease to test out a vehicle you might want to purchase or drive a vehicle for a short period until you’re in a better spot to buy. 

FINN also offers a wide selection of brands, models, and trim levels. You can choose which vehicle and color you want and deliver the car straight to your door. Your monthly payment includes registration, insurance, maintenance, and depreciation, all perks of leasing without the pesky fees and tiresome negotiations. All you have to pay for is fuel.