Leasing a Car the Smart Way

By: Charles Essmeier

Buying a car can be rather complicated, as the whole process
tends to be somewhat mysterious. It's often hard to know if
you're getting a good deal or not, even as the salesman claims
that he's selling you the car "at invoice." Leasing a car is
much the same way, except that the terminology is different and
you don't get to keep the car. You're still going to spend a lot
of money, though, so it makes sense to be as well informed about
leasing as possible.

For most consumers, leasing makes less sense than buying. When
you buy, you have a tangible product that you can resell later
or trade in for a new one. With a lease, the only thing you are
buying is the right to use the vehicle for a while. If you don't
drive a lot or if you just like having a new vehicle every
couple of years, leasing may be a good choice for you. Before
you get involved, here are some things you may wish to consider:

The money factor - This is the equivalent of an interest rate on
a car sale. The money factor, in order to remain mysterious,
will be presented as an odd number with a lot of decimal places.
To convert it to an approximate interest rate, multiply it by
24. The money factor, like just about everything else in a
lease, should be negotiable.

The amount due at signing - The size of the check that you have
to submit when you sign the lease can be sizable. You'll hear a
lot about low payments in the commercials, but little (except in
the fine print) about the amount you have to pay upfront. That
will include title fees, license fees, deposits and a reduction
in the capital cost that will reduce the size of your monthly
payments. Ask about this ahead of time; you don't want "sticker
shock" when you see the total.

Duration of the lease - Make sure you understand how long the
lease will last. If you want a car for three years, make sure
the lease isn't for 24 months.

What happens at lease end? You may have to pay, or you may get
to walk away, or you may have the opportunity to buy the
vehicle. The end of lease situation is spelled out in the
document; make sure you understand it before you sign.

Total mileage allowance - The lease will stipulate how many
miles you may drive over the course of the lease; you will have
to pay a per mile charge if you exceed that. The per mile fee
can be excessive, so make sure that the number of miles that you
are given matches your driving expectations. Keep in mind that
the mileage amount and the per mile fee is negotiable.

Each of these things can be an expensive nightmare if you
aren't prepared for them. Leasing a car is different from buying
one and you need to understand that long before you sign your
name on the contract. Otherwise, you could be in for an
expensive ride.





About the author:
©Copyright 2006 by Retro Marketing. Charles Essmeier is the
owner of Retro Marketing, a firm devoted to informational
Websites, including LemonLawHelp.net, a site devoted to
information regarding lemon laws for
automobiles and Car-Insurance-Help.net, a site about car insurance.