Educational Consumer Tips
Better Business Bureau
When deciding whether to lease an automobile, consider the following: * Closed-End Leases allow you to use the car for the entire term of the lease and return it without any further obligation upon termination of the lease. * Open-End Leases provide both the lessee and lessor with a few more options than with a closed-end lease. * Regardless of the type of lease you select, you will be required to pay certain up-front initial costs. These costs are normally lower than what is required as a down payment when you purchase a car. * Federal law requires the lessor to clearly disclose all initial costs prior to the time you sign the lease. These initial costs usually include some or all of the following (all of these items are negotiable) -Security Deposits -Sales Tax and License Fees -Advance Lease Payments -Capitalized Cost Reduction -Insurance
* When the lease expires, you may return the car and owe nothing, or even be entitled to a refund. However, if you have driven the car an excessive amount of miles, been particularly hard on the vehicle, or damaged any part of it, you may owe the company some money (this all depends on what is spelled out in the contract). * When you lease a vehicle none of the money you pay goes towards giving you equity or ownership of any portion of the vehicle. * Get estimates from at least three different companies and in each case compare both the total price and terms of each lease. * Be clear about what your short-term and long-term objectives are. * Learn as much as possible about the leasing company. * Do not select a company on low price alone. * Understand and keep a copy of the contract which is to include leasing period, vehicle description, maintenance rights and responsibilities, insurance coverage, total monthly payments, penalty clauses, oral promises, cancellation policy. * Fill in all blanks of the contract before signing.
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