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Do's and Don'ts of Leasing
Do...
- Your Homework. Learn as much as you can about leasing. Be sure to
understand how a lease works and the meaning of the terms.
- Read the Lease Contract - especially the fine print - BEFORE you sign
it. BE SURE to understand your obligations and liabilities for early termination.
- Make Sure All the Figures Add Up. Calculate the monthly payment
yourself. If it doesn't match with the payment on the contract, ask questions until you
understand why.
- Know the Invoice and MSRP for the vehicle you are leasing.
- Be Prepared to Go the Distance. Early termination of any lease is
seldom painless and almost always costly. Make sure that your personal situation will
allow you to fulfill all of the obligations of the contract.
Don't...
- Pay Too Much for the Car. Ask yourself: would I be willing to buy
this car for the capitalized cost? If the answer is no, go back to the negotiating table.
- Lease Without Gap Insurance. For just a few dollars a month, you
protect yourself from a big loss in the event of forced termination.
- Lease Without Full Disclosure of the money factor, residual value,
and the capitalized cost. If the dealer is reluctant, be persistent and state that you
will not lease without this information. After all, you wouldn't take out a loan without
knowing the interest rate, would you?
- Accept an Open-End Lease. Remember, in an open-end lease the payment
is based on an estimated residual value. If the actual value is less at the end of the
lease, you must pay the difference.
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