auto

Buying or leasing: Set a price first

Dear Terry,
My husband and I are looking into leasing our first luxury car. When doing my homework, I see that the invoice and MSRP includes the car cost and a destination fee, then any other chosen options. When leasing, does the destination fee still apply? Is the acquisition fee (quoted at $825 at one dealer) standard practice? Is it negotiable? I'm just trying to get a handle on any other hidden fees. We will be negotiating on price, as if we were buying, before we talk about leasing -- at least with the next dealer -- now that I've done my homework.
-- Teresa

Dear Teresa,
Good questions and congratulations on doing your homework. The destination fee, or delivery fee, should be considered part of the Manufacturer's Suggested Retail Price (MSRP) and negotiated as part of the purchase price. As you point out, what you should do is not tell the dealer you're planning to lease and first negotiate the lowest possible price. Then, say that you're interested in leasing the car at the negotiated price. When such things as the acquisition fee come into play, they too, are negotiable -- that $825 fee you mention is outrageous. You probably can't get the fee waived entirely, but it should come down to no more than $200, though in my opinion that is still too much.

Here are this week's reader questions:
Car's onboard data system could haunt you
Do the same dealer fees apply when buying or leasing?
Should I use my savings to pay off my car loan?
Is it better to pay cash or finance a new car?

If you have a question for Terry, e-mail him at Driving for Dollars.

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