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When you lease, you pay to drive someone else's vehicle. Monthly lease payments
may be lower than loan payments, but at the end of the lease you have no ownership
or equity in the car. To get the best deal, follow the advice below in addition to
the general suggestions for
buying a car.
- To help you compare leasing versus owning, the Consumer Leasing Act
requires leasing companies to give you information on monthly payments and
other charges. Check out Leaseguide.com,
Leasecompare.com and
Leasesource.com for online information
on leases including current lease deals.
- Negotiate all the lease terms including the price of the
vehicle. Lowering the base price will help reduce your monthly
payments.
- Ask for details on wear and tear standards. Dings that
you regard as normal wear and tear could be billed as significant damage at the
end of your lease.
- Find out how many miles you can drive in a year. Most leases
allow 12,000 to 15,000 miles a year. Expect a charge of 10 to 25 cents for each
additional mile.
- Check the manufacturer's warranty. It should cover the
entire lease term and the number of miles you are likely to drive.
- Ask the dealer what happens if you give up the car before the
end of your lease. There may be extra fees for doing so.
- Ask what happens if the car is involved in an accident.
- Get all the terms in writing. Everything included with the
car should be listed on the lease to avoid being charged for "missing" equipment
later.
The Federal Reserve Board of Governors offers a consumer
guide to auto leasing.
| Credit and Sublease Brokers
Con artists often prey on people who have bad credit and who cannot get
car loans. "Credit brokers" promise to get a loan for you in exchange for a
high fee. In many cases, the "broker" takes the fee and disappears. "Sublease
brokers" charge a fee to arrange for you to "sublease" or "take over" someone
else's car lease or loan. Such deals usually violate the original loan or lease
agreement. Your car can be repossessed even if you've made all of your payments.
You also might have trouble insuring your car.
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