Leasing a new vehicle does not have to be an uncomfortable experience. In fact, the more you know about leasing, the more enjoyable shopping for and negotiating a good deal can be. Before you accuse me of having twisted notions of what is enjoyable, consider that the car market is unlike any other retail market in terms of the breadth and depth of information and tools available to the educated consumer. Mark Engram, sales manager of a Columbus Nissan dealership from whom I recently leased a car, put it best.  He said, "you can hardly go into a grocery store for a can of soup, find out what the store paid for it, what its incentives were, and then negotiate with the grocer until he sells it to you for 2 cents over invoice!"  And yet, with so many resources available, that is exactly what an educated consumer can do when leasing a car.  Many reputable dealers will also tell you that they welcome educated consumers who know how to negotiate intelligently and reasonably.  Toward that end, the following is a recap of points to remember before embarking on your leasing adventure.

NEGOTIATING THE BEST DEAL

• Look for subvented lease deals!  Leases that are subsidized by manufacturers are often good bargains.  High residual values are usually the hallmarks of subvented deals. Often, high residuals are accompanied by reduced money factors.
   
• Don't play games if you intend to lease -- tell the dealer you are interested in leasing and open the negotiations with the cap cost.  Use pricing guides to help you in evaluating the proposed cap cost including selected options.
   
• Go in with credit!  If you are not sure about your credit rating, obtain a free copy of your credit report.  If you are confident, you can get pre-approved for a lease or loan going in, meaning YOU pick the lessor or lender.
   
• Check the insurance requirements under the lease.  Different lessors require different levels of insurance.  Shop around for cheap auto insurance.  For a cheap auto insurance quote follow the link and compare rates.
   
• Add gap insurance to your lease if it is not already provided.  That way, if your vehicle is stolen or totaled before the end of your lease, you will not be stuck paying the early termination balance (something your ordinary insurance will not cover).  The cost of gap protection should be no more than two hundred dollars and often it is included in the lease rate.  Read your gap insurance clause carefully.  Some contracts require your insurance company to "fully honor" your claim before the lessor becomes liable for the "gap" in coverage.  You should ask your lessor what this means exactly so you don't get left holding the bag in the event of a total loss. .
   
• Generally, avoid making a down payment on a lease.  One of the primary benefits of a lease is that it allows you to avoid making a significant, up-front cash outlay.  If you can invest the money and earn more than what you save in rent charges by paying the money to the lessor, the money is better off in your investment account.
   
• If you are trading in a vehicle, make sure you are getting the proper credit for your trade-in. Since leases are based on the difference between the negotiated purchase price and the residual value (a much smaller number than the purchase price), reductions in the cap cost from trade-in's (with equity) result in magnified savings on your lease payment.  Review your paperwork carefully and crunch the numbers to make sure you are getting the credit you bargained for.
   
• Know the basic elements of your lease: Cap cost, rent charge (or money factor), residual value and term.  Run the numbers and read your contract!  To learn the ins and outs of leases, Click Here.
   
• Consumers should generally avoid open-end leases.  If you do sign one, it means that you, and not the lessor, will be liable for the difference between the estimated residual value and the actual value of the vehicle at lease end.  Although Regulation M creates a presumption that any difference which exceeds three monthly payments under the lease is unreasonable, if the difference is due to your excessive wear or use of the vehicle, you may be liable for an amount that exceeds the three-payment limit.  Some lessors would contend that open-end leases are just as safe for consumers as closed-end leases because you are effectively liable for depreciation on a closed-end lease in the form of excess mileage and wear.  While this may be true, an open-end lease cannot cover you in the event of severe market depreciation or a simple mistake on estimating residual value. 

GENERAL POINTERS

• Do not be pressured into signing a lease or purchase agreement on your first visit.  Shop around and run the numbers.  You will be amazed at the money you'll save.  Use pricing guides and pricing services to help you uncover invoice prices, rebate programs and other dealer incentives which can translate into lower prices for you. Check the CarWizard Vehicle Reports for the most up-to-date and accurate pricing information.
   
• If you expect to pile on the miles, be sure to find out how much it costs to "buy" extra miles up front.  Some companies charge as much as $.15 per mile at the back end of the lease for mileage in excess of 10,000 per year.  You'll be surprised at how cheaply you can buy extra miles.  In some cases you pay less up front for extra miles than the per mile depreciation actually caused by your driving those extra miles.  In those cases, you win and the lessor pays.
   
• Know your lease-end charges like disposition and purchase option fees. 
   
• Know your early termination options.   When can you terminate (if at all) and how much will it cost you?
   
• Generally avoid leasing a vehicle for a term that exceeds the manufacturer's warranty unless you are prepared to pay for repairs to a vehicle you do not own.  In addition, the economics of a shorter term lease tend to be more favorable.
   
• Know the minimum insurance coverage required by the lease and shop the premiums. For a free insurance quote for CarWizard customers, Click Here.
   
• Leases are better on vehicles that are predicted to hold their value over the term of the lease. Remember, the higher the residual value, the lower the monthly payment.  Generally, new models have higher predicted residual values at the beginning of their design cycle.  Consult the the CarWizard New Vehicle Reports to get an idea of what the baseline is for the model you are considering .
   
• Take good care of your leased vehicle by following maintenance instructions in the owner's manual and have it cleaned and waxed regularly (even if you have to pay someone to do it!). The wax will help prevent dings and nicks for which you may be charged at lease end.  Your vehicle will be inspected after you return it and you will be liable for any damage to the vehicle beyond ordinary wear and tear.  If you are worried about being tagged with an excess wear charge, take you vehicle to an appraiser or a repair shop and find out how much it will cost to fix the damage.  You are usually better off making the repairs yourself rather than having the lessor find the damage and charge you.  Whatever you do, make sure your vehicle is clean when you turn it in.  The lessor's appraisers are human, and a clean, freshly waxed vehicle gives the impression that you were kind to it during the lease term, which enhances the likelihood that the appraiser will "overlook" minor items that the lessor might otherwise claim as damage beyond ordinary wear and tear.  In the end, your best bet is to treat your car like it belongs to a friend.