Car leasing has become a popular alternative to an upfront car purchase. If you are looking to lease a car, you should be aware of how the process works and the costs involved. Also, like any other financial deal, you should try to negotiate a good car lease.

Start by negotiating the car’s selling price. Keep in mind that this may be a bit difficult given the fact that your dealer may have already lowered the price to lure with a lower monthly payment. If the selling price cannot be negotiated, see if the dealer is willing to offer you an extra or accessory with your car.

Ask the dealer for rebates or incentives that lowers your capitalized cost. See if you can negotiate the disposition and acquisition fees with the dealer as well.

The dealer calculates your monthly lease payment amount, based on the mutually agreed terms. Make sure you do your own calculations as well, using the residual value, cap cost and money factor that the dealer uses.

Think twice about dealer offers like credit insurance, extended warranty or any add on service. Sign the lease agreement only if you are comfortable with the car leasing terms and payments.