Your lease agreement will specify who must pay for maintenance and repairs during the lease term. In addition, the agreement should come with a manufacturer's warranty. Ideally, it will cover the entire length of the lease and the number of miles you are likely to drive.
Most lease agreements require you to pay for excess wear and tear. This means that when you return the vehicle at lease-end, the dealer could charge you to fix anything deemed excessive by the lease agreement. Read this portion of the lease carefully. After all, every car is going to have a little wear and a few nicks after three or four years' use, and you want to be sure that the wear and tear standards are reasonable.
Look for a deal that includes "gap insurance" or waives "gap liability." If the vehicle is stolen or totaled, gap insurance will pay the difference between what you owe under the lease and what the dealer can recover for the vehicle -- a difference that could amount to thousands of dollars. Some leases waive gap liability.
Getting a Good Deal
The lease deals that are heavily advertised by car manufacturers are often the best. They usually offer low monthly payments or a high turn-in value for the vehicle at the end (so that you're not paying for a lot of depreciation during the lease term). In addition, many offer to lock in the price you'd have to pay at lease-end if you want to keep the vehicle.
However, to get these good deals, you cannot deviate from the advertised terms. If you want air conditioning, a larger engine, or any other feature that's not in the ad, the dealer will throw out the entire lease offer and you could end up paying more.
You can also explore financing a lease through someone other than the dealer. A number of independent companies offer leases -- look for these companies in the Yellow Pages under Automotive Leasing. Or check the Internet. For example, the National Vehicle Leasing Association (at www.nvla.org) provides a state-by-state list of both dealer and independent leasing companies. Also, if you belong to a credit union or AAA, ask about the possibility of financing your lease through them.
Although shopping in the fall is usually a good way to get a good deal when buying a new car, the opposite is true for leases. Because dealers have lost money on cars sitting in their lots, they often increase the monthly lease payments to make up for lost revenue.
Canceling Your Lease Agreement Early
Usually, you cannot cancel a lease agreement before the end of the term, unless you're willing to pay a substantial penalty. If you want to cancel your lease, look carefully at the provision describing what happens if you default or want to terminate the lease early. Ask the dealer or lessor to calculate how much it would cost you to terminate the lease early.
To learn more about leasing a car, see Nolo's Encyclopedia of Everyday Law, by Shae Irving and the editors of Nolo.
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