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When you lease, you pay to drive someone else's vehicle. Monthly payments for a lease may be lower than loan payments, but at the end of the lease you have no ownership or equity in the car.
Shop for a lease as if you're buying a car. To help you comparison shop, the Consumer Leasing Act requires leasing companies to give you information on monthly payments and other charges. Check out www.edmunds.com, Intellichoice.com, and www.Leasesource.com for online information on leases including current lease deals.
Negotiate all the lease terms including the price of the vehicle. Lowering the base price will help reduce your monthly payments.
Ask for details on wear and tear standards. Dings that you may regard as normal wear and tear may be billed as significant damage at the end of your lease.
Find out how many miles you can drive in a year. Most leases allow 12,000 to 15,000 miles a year. Expect a charge of 10 to 25 cents for each additional mile.
Check the manufacturer's warranty. It should cover the entire lease term and the number of miles you are likely to drive.
Ask the dealer what happens if you give up the car before the end of your lease. There may be extra fees for doing so.
Ask what happens if the car is involved in an accident.
Get all the terms in writing. Everything should be listed on the lease to avoid being charged for "missing" equipment at the end of the lease.
The Federal Reserve Board of Governors offers a consumer guide to auto leasing at www.federalreserve.gov/pubs/leasing/
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