There are two types of leases. With an open-end lease, the leasing company estimates the vehicle’s market value at the lease end, which determines the monthly payments. If the car’s actual value is lower than the estimates value when the lease expires, you’re required to make up the difference. A closed-end lease is where payments and the car’s residual value is preset and you’re not responsible for the car’s actual market value at the lease end.
The decision to lease shouldn’t be based solely on low monthly payments. You should consider how long you plan to keep your vehicle, how much of a down payment you’ll make and whether you value vehicle ownership.
Your BBB offers these auto leasing tips:
Negotiate lease terms, including the price. A lower lease price means lower monthly payment.
Ask about extra or hidden charges, such as extra mileage, wear and tear and lease termination fees. If you drive a lot, a lease may not be your best option.
Get everything in writing. The Consumer Leasing Act requires the lease to state the cost, value of vehicle, insurance requirements and penalties for default of lease.
Look over your contract before signing. Don't be pressured into signing and if you're not sure about something, ask.
Auto dealers had more than 38,000 complaints in 2011 throughout the United States and Canada. So, it’s important to check them out before doing business with them. Your BBB can provide lists of BBB Accredited auto dealers and business reviews on one’s you’re considering. Contact your BBB by visiting www.bbb.org or calling (937) 222-5825 or (800) 776-5301.
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