Avoid Extra Cost at the End of Lease

by : teahupoo

These days it seems every where you turn car dealers are trying to sell you on leasing a car instead of buying. While leasing may be good for some, for the majority of people it is not. Here are a few things to watch out for when negotiating a lease, and yes just like a purchase they are negotiable.

When you lease a car you need to pay particular attention to the terminology for what you are responsible for at the end of the lease. Sometimes they charge a vehicle disposition fee which I have seen as high as $500! They may charge you for excessive mileage, excessive wear on tires, etc. Let?s take a closer look at these things.

First off, we have the disposition fee which is the fee charged by the leasing company or bank if you decide to turn the vehicle in instead of buying it at the end of the lease term. The fee is usually described as necessary to cover expenses that the company will incur to sell the vehicle such as getting it ready to sell, auction expenses, and commissions. Be sure that the fee is stated clearly and remember that you can negotiate.

One of the biggies that nails a lot of people who lease is the excess mileage charge. Nearly all leases charge these penalties; as a matter of fact I have never seen one that didn?t. These charges can add up quickly with some companies charging as much as 30 cents per mile for every mile over the mileage allowed in the contract which is typically only 10,000 to 12,000.

I don?t know about you but I drive more than that and so do most people. The average is around 15,000 miles a year. This can be negotiated into the lease so be sure that you get extra miles upfront, it?s a whole lot cheaper that what you will pay on the backend.

Another way that you get stuck is by vague "excess wear and tear? clauses. You need to make sure it is spelled out in the contract what the definition of excessive wear and tear is. If there is no description telling you what the standards are that they go by then it will be up to the leasing company and the person inspecting the car when you turn it in and you will left holding the bag. If you have minor damage you are better off having it repaired yourself than turning it in and letting the lease company handle it. They will always charge more than what you can get it done for.

My suggestion as a former automobile sales manager is that if you are stuck on leasing that you make sure you stay under the mileage allowed, keep maintenance records, repair any damage, and get the vehicle looked over and appraised before turning it end at the end of the lease. If you have all of your records in this way you are far less likely to be hassled.