Free preview · from the dealership side of the desk
Two cars with the same sticker can lease for payments $100 a month apart, and the dealer didn’t do anything to cause it. The difference is the residual value: the lessor’s prediction of what the car will be worth when your lease ends. It’s set before you walk in, you can’t negotiate it, and it’s the main reason some models are great leases and others never will be.
One insider truth worth knowing now: the residual is a percentage of MSRP, not of your selling price. Negotiate $3,000 off a $40,000 car and the residual doesn’t move, so you pay $3,000 less depreciation, about $83 a month on a 36-month lease. Below: why a high residual makes a cheap lease, what you can and can’t control, how to find the current residual for the car you want, and how it decides whether you’ll have equity at lease end.
Members read the rest · 8 more sections
In the full guide
- What the residual is
- Who sets it
- Why a high residual makes a cheap lease
- What you cannot negotiate
- What you can control
- How to find the current residual
- The residual at lease end
- Your game plan
Knowledge Hub membership · $49/mo, cancel any time
Read the full guide — join the Knowledge Hub, $49/mo, cancel any time
Every guide, checklist and script we use with clients, written from the dealership side of the desk, with new material every month. Start with a free account; you land right back on this guide.
Read the full guide — $49/moAll Hub guides
Cancel in one click; no contract. Members also get the checklists and scripts that go with each guide.