Beware The Fine Print Could Cause Headaches
With their low monthly payments and no money down, leases make driving off with a new car easy. But beware of apparent bargains. Leases are more complex than traditional loans and sometimes include potentially costly fine print. And few leases are identical, so it pays to read closely before signing. Here are some things to look for:
-- Get a closed-end lease. In an open-ended lease, the customer may have to make extra payments if the car resells for less than projected. The lessor takes the risk in a closed-end one.
-- Don't get talked into a downpayment. It's usually not required. A normal security deposit is a month's rent.
-- Be sure you can get out of the lease early--and know the penalty if you do.
-- Check for mileage limitations and how much you will pay if you exceed them. About 10~ per mile is average.
-- At the end of the lease, you may be liable for excess wear and tear. The best leases provide guidelines for acceptable damage--tire wear, dings in the doors, and that sort of thing.
-- A onetime administrative charge, or lease-acquisition fee, of $250 on average, is standard. Don't pay too much.
-- Check whether you may buy the car when the lease is up--and if the purchase price is determined at the outset or by market conditions at the end.
-- Whether you're planning to buy the car or not, ask the price on which the payments are based. Compare it with the going sales price for that model to be sure you aren't overpaying.