What to Look for in an Auto Lease

Individuals looking to save money with lower monthly payments sometimes lease rather than purchase automobiles. When leasing an automobile, different considerations come into play and certain factors need to be examined. Before leasing an automobile, consumers need to know how much money is due when signing, as well as any additional charges at the end of the lease. Comparing the lease terms to the purchase terms can highlight differences, especially when it comes to negotiations.

Amount Due

When leasing a car, it is necessary to find out how much money is due at signing. There are various fees incorporated into the signing amount, including security deposits, as well as title and registration fees and the initial monthly payment. Before signing any lease, it is prudent to get firm prices on the amount of money needed when the lease is signed.

Mileage

When examining an auto lease, pay attention to such areas as mileage. Some leases contain mileage provisions. When the lease is over and the car is returned, the person leasing the car pays for every mile over a certain limit. Depending on the mileage limit, substantial fees can accrue.

Gap Insurance

People looking to lease a car need to make sure gap insurance is available. When a leased car is involved in an accident, the insurance company pays the cash value of the car. Unfortunately, the cash value considered is the actual cash value and not the actual retail value. Sometimes, a large gap exists between the actual cash value and how much remains on the lease. Having gap insurance ensures the insurance company pays the difference.

Comparison

When looking at an auto lease, it is useful to compare the terms of the auto lease with conditions for buying the car. Trade-offs are found in both areas. While leasing provides the consumer with the opportunity to put no money down on the car and buying requires up to a 20-percent down payment, the person buying the car eventually owns the car, while the person leasing will not own the car, unless a lease-to-own program is in place.

Negotiations

Very few elements in a lease are negotiable. One of the few negotiable items, however, is the price of the car. The dealer has a limited amount of room in which to engage the customer in negotiations. For the most part, dealers act as agents for the leasing company, limiting the amount of negotiation allowed.