You might think car lease terms are set by leasing companies and dealerships, but that isn’t always the case. You can set your own lease terms, which means negotiating a bit with the leasing company, that will help you stick to a budget and get everything you want. This will help prevent unexpected costs charged to you upfront and at the end of your lease term.

The best auto lease deals for you are those with a consumer-friendly capitalized cost (cap cost). Before you start negotiating, the cap cost will likely be higher than what you want to pay. Continue reading for more information on how to negotiate to set your lease terms.

How to Set Your Car Lease Terms
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Negotiating for the best auto lease deals is common. You can usually negotiate the cap cost, which is the agreed-upon selling price of the car including acquisition fees and any other fees applicable to the offer.

Most companies want to charge you the full MSRP pricing, which is similar to what a car dealer would charge when you purchase a vehicle. However, the cap cost is a negotiable aspect of the lease offer. Before signing on the dotted line, be prepared to negotiate for a lower price.

By negotiating a lower cap cost, you are negotiating for lower monthly payments. You can lower it in a few ways, but the easiest is to make a bigger down payment.

For example, a down payment of $5,000 is known as a $5,000 cap reduction, because it is reducing the cap cost.  Adjusted (net) capitalized cost is the cap cost after the subtraction of cap reduction items. For example, a $25,000 lease to which you put a $5,000 down payment has a net capitalized cost of $20,000.

Other ways to negotiate your terms include setting ideal mileage allowance terms. If you drive a lot, you may consider increasing the mileage allowance to avoid paying overage fees at the end of your lease. Some dealers are more willing to increase the mileage allowance if they are sticking to a certain selling price.

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