A Guide to Leasing a Car

Is leasing a car for you? If you think you can drive a car less than 15,000 miles a year, and can keep the outside and inside looking clean and undamaged. And you want a car that is expensive, but you don't have the money it will take to buy it.

Then car leasing may be right for you, but there are some things you should know before running out to lease that Jaguar you've always wanted, because if you're not careful, you could end up spending more money than you should.

Read The Small Print

If you see a leasing ad for a car you want, read the ad thoroughly. Don't assume anything, and don't think they are
telling you everything you need to know. If you can't read the ad, then call the 800 number that is given.

It's important to know that ads for car leasing only state the low monthly payments in big print, while printing the very large down payment in very small, fine print.

You may also discover that instead of leasing the car for 2 years, you end up having to lease it for 30 months. This is more interest money coming out of your pocket. So read the fine print.

Find Out About Leasing Fees

Before becoming too enmeshed with the car you want to lease, find out about the leasing fees.

You will be charged an acquisition fee that has to be paid up front. You may also be charged $300 or more for a disposition cost, for the dealer shipping this car to an auction or used car dealer.

What Is The Wear And Tear Policy

Since there is no standard in place to cover what wear and tear constitutes, you need to ask the dealer what they consider wear and tear to be.

Don't sign any papers until your get a clear understanding in writing from your dealer.

You want to know what they consider it to be, the price it will cost to fix it, and if knicks, cracks, chips and smells considered to be wear and tear. Find out the large and small details of this condition before signing.

Negotiate The Car Price

Don't be among the 91% of people who don't negotiate the car's total price. Since your monthly payment will be based on the car's total price, it's in your best interest to haggle.

Check with several other car dealerships and find out their lowest price, then check the new-car price guide to find out the dealership cost.

Now you are prepared to negotiate. You want a lower total car price, you want the lowest monthly payment you can get without more money being added to your down payment.

Ask your dealer to check with other sources that do leasing, like banks, etc. You're looking for the lowest car price you can get.

Use The Auto Maker Financing

It's easier to deal with the auto maker's finance company than it is to deal with a bank. So try to get your financing done through GMAC, Ford Motor Credit or Chrysler.

These companies make money selling cars, so they aren't interested in getting extra money out of you for wear and tear, and those extra miles you put on the car. You also won't have to worry about getting permission from a bank, to continue the lease if you move out of the state.

Purchase Gap Insurance

If the car dealer doesn't provide gap insurance as part of the cost of the lease, then you need to consider buying it yourself.

Gap insurance covers the difference of what you owe and what your car is worth. You need this insurance in case of the car being stolen or totaled in an accident.

Purchase Extra Miles

You know "Murphy's Law?" Well this is the same. The miles you think you will drive, always end up being more than you will drive.

So purchase those extra miles. Most people think they drive 12,000 miles per year, but that's only if the car in parked every day.

If you exceed the amount of miles that was in the contract, you will pay 15 cents of more per mile. Buying those extra miles at leasing will cost you about 8 or 9 cents, and if you don't use them, the money should be refunded.

Take Care Of Repairs

Always try to get a lease for 36 months or less. In the long run, this will save you from having to spend more money on costly repairs.

But within that 36 months - if you need any repairs - take care of them. It cost less for your mechanic to do the repairs than it does for the dealership's mechanic.

Terminating The Lease Early

You may get a call from the dealer with an offer to terminate your lease early. Do this only if it benefits you. But most likely it's to benefit the dealer.

He either wants to get a better deal by leasing the car to someone else or he wants to sell it to someone else for a profit. If the car is this hot, then keep it to the end of your lease, purchase it, sell it yourself and keep the profit.

Leasing and driving your favorite car shouldn't be a time of stress and anxiety for you. So be sure this is what you really want before committing yourself.

So the question remains. Is leasing a car for you? It can be, if you take into consideration all the suggestions that were give above.