How Do I Lease a Car?

Car leasing is a convenient and inexpensive way for someone who needs a car for less than a year to get one without the hassle of taking out an auto loan and purchasing a vehicle. Leasing a car is as easy as going to dealership and inquiring about leasing options. Getting a good deal, however, involves some research and hard negotiation.

Difficulty: Moderately Easy

Instructions

1. Prepare to lease a car for at least 24 months. Most leasing companies require customers to lease the car for at least that long. That can be quite a commitment. Calculate how much money that you will pay for the car during that period. Include fees and make a reasonable depreciation estimate on the vehicle. If the person that you're leasing the car from will not give you an accurate estimate, take your business elsewhere.

2. Compare the terms of the lease and the cost of it to getting an auto loan for a similar vehicle. Examine the terms of the lease agreement carefully for surcharges involving insurance and accidents. Decide whether you want to lease a new or used vehicle. New vehicles will be less likely to have performance issues, but you will end up paying more for the depreciation of the vehicle over the period of the lease.

3. Negotiate a price with the dealer just as if you were purchasing the car. Many people who go in for a lease do not know that they can negotiate the price down or get special features on the vehicle by driving a hard bargain. Bring in comparisons from other auto lease companies and car dealer competitors to use as leverage during your talks (see Resources below).

4. Consider bypassing the dealer and going straight to a leasing company. Dealers do not typically operate a lease--they only facilitate the initial deal. This will be less convenient, but the savings may be considerable--the dealers take a cut of the leasing transaction and add very little to the process. Banks, credit unions and car companies often run their own leasing companies. Contacting one of them directly may get you a less expensive lease with better terms.

5. Study the terms of the lease carefully before signing anything. Many lease deals tack on hidden fees and use other ugly tactics that end up hurting consumers. If a lease monthly payment looks too good to be true, look for the catch. Take care when shopping for auto leases--there are many shady operators out there looking to take advantage of consumers who don't do their homework.

Resources

• Auto Lease Guide
• BankRate: Key Questions to Ask When Leasing
• Edmunds: Three Tough Leasing Questions