Things to Look Out For
If you need a car to drive, you might want to lease one.
The rules for leasing a car are not the same as for buying one. Be careful and look before you lease.
Here are some things you should know . . . .
- When you buy, you own the car.
- When you lease, you pay to drive someone else's car
- No matter what kind of lease you get you will have to pay monthly payment plus fees.
- When you lease you may be able to get lower monthly payments than if you buy. When the lease is over, you must return the car
- You may be able to get a good deal on a lease. Be sure to ask plenty of questions and shop around before you lease. This way you will get the deal and car that work for you!
Tips to make leasing easier . . . .
Do not be afraid to offer a price lower than the one the dealer wants. Do not be afraid to ask for lower fees. Be reasonable. Put the deal in writing.
Most leases allow you to drive 12,000 to 15,000 miles per year and charge extra for more miles. Leased cars have a manufacturers warranty that will cover repairs.
Learn leasing lingo like these terms . . .
Closed End Lease. You pay for mileage and "wear and tear" at the end of the lease.
Open End Lease. You pay the value of the car at the start of the lease minus the value at the end of the lease.
"Lease Inception Fees" are fees paid at the start of the lease. These may include down payment, security deposit, taxes, title fees or first month payment.
"Capitalized Cost" is the price of the car plus taxes and extra charges like service contracts and registration fees
Be happy with the answers to these questions before leasing . . . .
- Will you have to pay for extra mileage, wear and tear, damage to the car, ending the lease early or for any other reason? If yes, how much will you have to pay?
- Is the warranty on the car good for the lease period? Is it good for the number of miles you plan to drive?
- Can you buy insurance in case car is stolen or wrecked during the lease?
- The law says that lessors have to tell you about all leasing costs before you sign the lease. Take a copy of the [Leasing Disclosure Form] and ask the dealer to fill it out. If the dealer says no, think about going somewhere else. If the dealer fills it out, keep a copy for your records!
Before you sign take the contract home, read it!
If any of it is confusing, do not sign it! Hire a lawyer to help explain the lease to you. A lawyer can also help you check the cost form filled out by the dealer.
For more information visit www.ftc.gov/autos
