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Shopping for a car lease can be a frustrating and confusing process. Many people dislike the thought of negotiating a contract with a car dealer. They get uncomfortable because of confusing and unfamiliar language in the contract, as well as pressure tactics from pushy sales people.
Leasetrader.com, the company that lets you transfer out of your vehicle lease early, offers the following tips to help people become smarter consumers when shopping for a vehicle lease. The following tips are available at www.LeaseTrader.com/lease_tips.aspx
Car Lease Shopping Tips:
1) Choose your own vehicle lease company – You don’t have to settle for the leasing company provided by the auto establishment.
2) Request a leasing company that accepts lease transfers.
3) Look before you sign. Break down the terms of the contract for better understanding, including everything from capitalized costs to estimated residual value.
4) Shop as if you’re buying a car. Negotiate all lease terms, including the price of the vehicle.
5) Ask for all rebate programs that apply to the vehicle and the leasing program.
6) You do not have to let auto establishments pressure you into losing the deal if you want to take time to think it over.
7) Have the auto establishment special order a vehicle with the exact features you’re looking for.
8) Get details on all remaining fees listed as “other.”
9) Learn the leasing language. Have the dealer explain early termination fees, early termination penalties and the transfer options.
10) Most importantly, you do not have to remain in your vehicle lease for the life of the contract. Transfer your lease to someone else when your vehicle needs change.
Here is some additional information provided by the Department of Justice (DOJ):
Leasing has become a popular alternative to buying a vehicle, and can have some advantages over buying. You are not committed to a particular model of vehicle for more than a couple of years, and you don't have to worry about being stuck with a "lemon." Leasing a vehicle is not the same as renting a car for a short period of time, such as for two weeks while you are on vacation. Auto leases typically extend for two or three years.
Leases differ from traditional methods of financing a vehicle in significant ways. Motor vehicle leases may contain provisions imposing greater costs over the term of the lease than would be expected from owning the vehicle. For example, motor vehicle leases frequently contain early termination penalties, under which a consumer may be liable for large cash payments if she or he breaks (or defaults on) the lease prior to the full term. Most motor vehicle leases also contain mileage limitations, and may impose high charges for every mile the vehicle travels in excess of those limits. Financial considerations at the end of the lease may include a charge for excess wear and tear or a charge for the difference between a vehicle's fair market value at lease end and the value predicted for the vehicle when the lease started. Consumers must understand all potential costs associated with a lease to accurately evaluate whether a lease is really a better deal than conventional financing.
The type of information that must be given in a lease for many kinds of consumer products, including vehicles, is regulated by federal law through the Consumer Leasing Act. Regulation M issued by the Federal Reserve Board under the Consumer Leasing Act details the precise language to be used in consumer leases and in advertisements about consumer leases. New Hampshire's Motor Vehicle Leasing Act, RSA 361-D requires several additional disclosures in common motor vehicle leases.
THE LAW
The Consumer Leasing Act applies to personal property leased by a consumer for personal, household or family (not business) use for a period of more than four months.
Items such as cars and trucks would be covered. A business which offers vehicles for lease must give a written statement to the consumer, before the lease is signed, containing the following information:
• A description of the vehicle being leased
• Whether a security deposit is required
• The amount due at lease signing or delivery (such as a security deposit), if any
• The payment schedule and dollar amount of the periodic payments
• Any other charges that are not part of the monthly payment
• The total of all the payments (in other words, the amount that will have been paid by the end of the lease)
• The payment calculation including the gross capitalized cost (you can ask to have this itemized), capitalized cost reduction,
adjusted capitalized cost, residual value, depreciation and any amortized amounts, rent charge, total of base periodic payments,
number of lease payments, base periodic payments, itemization of other charges, and total periodic payment
• An early termination notice, and disclosure of any early termination or default charges
• The residual value of the vehicle
• A statement of who is responsible for routine maintenance, and the wear and use standards of the lease
• Whether or not you may buy the vehicle, and if so, when and under what conditions, including price
• Amount or method to determine end-of-lease liability
• Any other fees and taxes that have to be paid, and who pays them
• Any insurance that is needed and paid for by the consumer, and that which is paid for by leasing company
• Any express warranties on the item to be leased
• The standards used to determine "wear and tear" and mileage limits
• Whether the leasing company will hold a "security interest" in your vehicle
• Information about charges for late payments
For more information on car leases and car lease shopping, please refer to the following resources:
http://www.ftc.gov/bcp/conline/pubs/alerts/lease.shtm
http://doj.nh.gov/consumer/sourcebook/auto_lease.html
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