Description: Always read the fine print. Familiarize yourself with all of the fees and charges. These may include destination, registration fees, security deposits, and end-of-lease service charges. When you hear that radio or TV spokesperson blaring, "$199 a month, no money down..." assume there's more to it. ("Glossary of Leasing Terms") Be aware of the new leasing laws, and what information the dealer has to disclose to you before you sign a lease. As of January 1, 1998 the government signed into law the Consumer Leasing Act (Regulation M) which enforces what exact information an auto lessor must provide you, the consumer. For example, the dealer or leasing company must disclose to you: All fees, taxes and insurance requirements All maintenance responsibilities, the exact standards for 'wear and tear,' and the terms of your warranties The option to buy the vehicle at the end of the lease All late payment charges, security interests, and charges for early lease termination. NOTE: While Regulation M requires that some information, called "segregated disclosures", MUST appear on your lease, there is other information that MUST also be provided but will not have to appear in any one place on a lease. The Federal Trade Commission website () has a lot of great consumer information. Also visit Comparison shop. Manufacturers, dealers and financial institutions can offer different lease rates, and they are not always set in stone. Shop as if you're buying a vehicle. Know the vehicle's price, before finding out the lease terms. That way the selling price won't determine your lease arrangements. Set the selling price FIRST. Get all the terms in writing. Don't be dazzled by deals, and nail down all the details. TIP: Remember, different parts of a lease can be negotiated. Play around with different monthly payments, money down, etc. to get the best overall deal. It can be a good idea to ask for alternatives to advertised lease specials. Know: The up-front cost, which includes the capitalized cost The monthly payment How long the lease is for The agreed-upon value of the vehicle, getting a lower value cuts down on your monthly payment All charges due at the end-of-lease Mileage allowed, and what you're charged if you exceed it. Whether the lease includes "gap" insurance coverage, which protects you if it's stolen or totaled. The option to buy at the end of the lease-or earlier Choose a vehicle that will keep its value well. Leasing can put you into a wildly luxurious vehicle, but it is not always a good deal if it steeply depreciates. Try to get a "closed-end lease" to avoid paying if the residual and market value of the vehicle doesn't add up when the lease is over. Then, if you have a case where the residual value is lower than actual market value, you can buy the vehicle at a profit. Almost all auto leases are "closed-end" now. Beware of "wear-and-tear" costs. They certainly will charge you for damage and rough treatment. Ask whether there will be extra charges for excessive mileage, wear and tear, disposition, and early termination.
Know that if you opt to buy at the end of the lease, it will end up costing you more than financing from the get-go. If you really want to own, try to choose to buy from the onset. Consider "gap insurance" to cover the difference--which can be thousands of dollars--between what's on the lease, and what the vehicle's worth if it's totaled in an accident or stolen. Review: If you lease through a traditional dealer, feel free to take a copy of the contract home for your review, away from any pressure.
Familiarize yourself with leasing language--which can sound like gibberish if you don't know the concepts and terms. See our "Glossary of Leasing Terms" for a crash course that will make the leasing experience less confusing.
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