Car Leasing Guide: Knowing the Car Lease Contract
Research is the best armor against car lease scammers, but there is another important facet that needs to be given attention to and that would be reading and understanding the car leasing contract. This will surely equip you against hidden charges and make you knowledgeable that car dealers won't be able to manipulate you.
The most critical part of the car lease contract that you need to study and focus on is the "Federal Consumer Leasing Act Disclosures" part. This is the part that has all the pertinent information regarding your car lease agreement: how much is your sign-up fee, your monthly payment, the number of payments you need to make, how to calculate you car lease payments, what are the rules for early termination of the contract, and other pertinent facts. Since this is quite a new regulation, there are actual charges that are not regulated in the contract. Examples of which are the amount for trade-in, the actual price of the vehicle and sometimes the monthly payment is not even accurately calculated.
Try to understand the deal about the overall wear and tear of the leased car. You would have to make sure with the car dealer what is under the normal wear and tear for the car on lease. Normally, the mileage for a car would be 12,000 to 15,000 while there is a charge of 10 to 25 cents for every extra mile.
Although early termination is part of the "Federal Consumer Leasing Act Disclosures," you need to focus more on the rules regarding this aspect of the car lease deal since there are usually high charges to be incurred in this aspect.
Make sure also that gap insurance is part of the car leasing company’s policy or best of all if it’s part of the car leasing contract. This will arm you against penalties or paying the early termination fee if in case you lost your car due to theft or if you had an accident. Try to check also on other insurance coverage and make sure that you get maximum insurance coverage. Most car lease contracts require maintenance of insurance coverage: $100,000 per person for injury or death, $300,000 per occurrence for property damages. On the other hand, $1,000,000 is required for coverage in liability in Canada. Most car lease contracts won’t show you the interest rate and also the acquisition fee. The acquisition fee is usually part of the vehicle’s price.
All these you need to consider since once again, research is the keyword before closing a car lease deal.
Sources:
https://www.leaseguide.com
https://www.ehow.com
