So, you’ve shopped around, you’ve weighed up the pros and cons, and you’ve identified one or more companies that could lease you the business vehicle(s) you require. Now’s the time to negotiate an excellent-value lease agreement.
Step #1: know what you want
The most important factor in negotiating a good deal on a vehicle lease is knowing what your ideal car or van would be like.
How many passengers, or how much freight must the vehicle accommodate? How fuel-efficient do you need it to be? Should the choice of vehicle make a statement about how prosperous, eco-friendly or charismatic your company is?
Answer every important question you can think of regarding what your business needs from its leased vehicle(s) to create a specification.
You can then compare your ideal vehicle specs with the lessor’s range, which should be listed on the lessor’s website (e.g. see Sixt Leasing’s vehicles for lease here). Identify the vehicles best-suited to your business, and keep your ideal car specs handy in-case the lessor can suggest advantageous alternatives when the time comes to negotiate.
It’s also important to know your ideal lease terms. Would you like the option to buy the vehicle after the agreement has ended, or would you prefer to return it? Would you be happy for there to be a cap (called an “exemption limit”) on the number of kilometres the vehicle can travel before incurring extra charges? Finer details like these can significantly affect the rate you pay.
And finally, how much support do you require from your lessor during the agreement? Some lessors offer attentive customer support, and supplementary services such as vehicle insurance provision and fleet management (we’re proud to say Sixt Leasing provides all three); whereas others take a more hands-off approach. If a supplementary service improves efficiency or cuts costs for your business, you should factor that added value into your evaluation of a lease agreement.
Once you’ve defined what you want from your car, your lease terms and your lessor, you can start to pinpoint the pros and cons of one lessor vs. another. This can be an effective bargaining tool when in negotiations. You might say: “Another leasing company is offering the same vehicle at a lower monthly rate. Can you come down a bit and match them?”
Step #2: know what your lessors want
Every lessor needs to turn a profit. The profit margin on leasing a vehicle is linked to how much that vehicle cost the lessor to buy, so bear in mind that the vehicle’s “Cost of Purchase” will set a limit on how far you can haggle down. That said, there’s often wiggle room to get a better deal out of a lessor – especially if you can tick some other boxes to reassure them they are making a beneficial arrangement.
Before engaging in a long-term van hire or car hire, lessors want to be sure you’ll reliably make your payments throughout the agreement. As such, they will likely run a creditworthiness check on your business.
This means an excellent credit rating can be a handy bargaining chip in a lease negotiation – so we’d advise finding out your current score. If your rating is poor, you should take measures to improve it before starting negotiations. If it’s good, you can drive that message home to the lessor.
With an eye on the future, perhaps one of the best bargaining approaches a business can take to leasing is to be a perfect customer. That doesn’t mean sending the lessor fruit baskets and Christmas cards (though both are appreciated); rather, it’s about paying on time and communicating well. Ticking these two boxes may help you secure a better deal if you decide to apply for a follow-on agreement after your initial lease.
Step #3: initiating the negotiation
Once you’ve developed a clear and easily-communicable understanding of what both you and your lessor want from a lease agreement, you’ll be in a strong position to negotiate a good deal.
To initiate a negotiation, you’ll need to contact your prospective lessor by phone or email, to detail your requirements and request a quote (you’ll have to check first whether the quote is free).
The time to haggle comes once you’ve received the quote. Does the lessor’s offer match your requirements – and if not, which weaknesses can you point out? What’s the cost for each item involved in the lease – and have you been quoted a better price for the same service by other lessors?
Open a discussion with the lessor’s sales agents, and bring these points to their attention. Your reward could be a better deal on your business vehicle lease.