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Consumer Guide: Leasing a Car

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From 8 On Your Side of News Channel 8

Published: April 2, 2008

Some car dealers would have you believe leases are a big mystery ... but leases are determined by an exact formula that you need to know!!!!!!

Leases are calculated several ways ... but generally and simply put ... you take the car's purchase price, minus what it will be worth at the end of the lease, divided by the number of months. Demand to see the calculations and how they were figured.

When you read those attractive lease ads - be careful. The large print reads zero money down - low monthly payments ... but read the small print. When they refer to capitalized cost reduction, this may actually be a required down payment.

Remember, you have the right to shop around and negotiate the lease price just as you would any other purchase. Take your trade-in and any down payment off that negotiated price and get this in writing.

Consumer Reports warns against leases that are open-ended, have 12,000 mile yearly caps, and those that require large upfront costs. Also, investigate insurance requirements before signing.

If you're thinking of buying the car at lease end, check the market value ... you may want to pass if it's less than the amount you're supposed to pay.

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