Lease A Car:

We love leasing cars, because we can put somebody in a new car the we would not have been able to do with a purchase or we can make a killing (profit). Many believe there is no negotiating on the vehicle when there is a lease. They just believe it is something different that just has a certain lease payment on a vehicle and that is all there is to it. We love those lease people.

Car Leasing can offer the consumer lower monthly payments than purchasing a car and that is why many people actually consider a lease (Payment Buyer). There are some great advantages of leasing, if they fit your needs. Sometimes in makes a lot of sense where a business is leasing or paying for the lease. In some circumstances the business can write off the lease payments on the business taxes as an expense (check with your accountant). On the other hand if a business is buying a vehicle they would typically have to set up an appreciation schedule and would not be able to take that depreciation expense at the same rate that they would be financing the vehicle. (again check with your accountant, we are sales people not accountants)

I have many customers that regularly lease vehicles. They get a new vehicle every 3 years and the vehicle is always covered under the manufacturers warranty. See The Basics of Car Leasing.

The reason that your lease payments are lower than financing a vehicle is because your are really just financing the amount of time that you are using the vehicle. For example 3 years. You fill find that the faster a vehicle depreciates in the market place, the higher the lease payment.

There are many aspects to vehicle leasing that would take up many pages to explain it all, but I want to fill you in on the main issues you need to pay attention to and to keep you from being taken to the cleaners. You can also visit the Car Video Learing Center.

There two main types of leases:
A Closed End Lease :The value of the vehicle at the end of the lease is determined a the beginning of the lease and regardless of what happens to the value of the vehicle in the market has no impact on you. You are responsible for excess mileage charges, damage, excessive wear an tear, and disposition fees at the end of the lease, depending on who you lease through. (the Financial Institution)

An Open End Lease: The value of the vehicle at the end of the lease is determined by the lessor. If there is any difference in value from the original lease agreement terms YOU are responsible for this expense. (and there usually is some amount that you will have to pay in a lump sum, it will suprise you)

Lease expenses that we don't talk about, but they are included.
Capitalization Costs: an amount determined by lessor for leasing car
Lease Inception Fees: this is a list of charges such as taxes, title, documentation fee, first payment, license, acquisition fees (what is that?), conveyance, disposition and preparation fees. ????? They fees are not usually itemized on your paperwork.
Gap Insurance: gap insurance is a great thing, but what are you paying for it

lease-contract

Federal law requires lessors to provide lease cost information before you sign the lease. Some dealers may be willing to provide the information during your shopping process. If the dealer declines, consider shopping elsewhere. Here is a handout from the Federal Trade Commission about leasing that includes a blank lease, take a look.

If you are going to lease a vehicle be aware of the items:
* Extra mileage charges - these could be very costly so make sure your lease includes sufficient miles per year that you will not go over your allowance, and be aware of the charge per mile.
* Is Gap Insurance included and how much is it?
* What is normal wear and tear? Door dings, minor scratches, dirty carpet or upholstery?
* Does the Manufacturers warranty last as long as the lease?
* Penalties for early termination?
* What are the inception fees? the breakdown
* The price of the vehicle, you can negotiate the price of the vehicle just as you can in Buying a New Car section. This step alone can save you thousands.

Familiarize yourself with the Federal Trade Commission Handout on leasing and the forms used. The paperwork will show all the numbers, terms, residual values, and any other details. Like any contracts and documents, READ THEM and be clear about what you are signing.

Finally, buying your lease vehicle at the end of the term. Should you decide you want to buy your leased vehicle at the end of the term rather than return it, make sure you go through the Financing Section first. That transaction is the same as buying a car except you do not have to negotiate the vehicle price. We can still potentially make thousands of dollars on that transaction.