The days of cheap leasing are gone. Before you ink in your signature on that lease make sure you understand what you are signing first. Automobile lease advertisements are full of new low monthly payments such as $129.00 or maybe $156.00 or even a Cadillac for $299.00 per month. However, off to side is a small number that indicates the amount of money “due at signing” which can range from nothing down up to $3,500.00 dollars or more. This upfront money obviously makes your total lease much more expensive than advertised. Another new number that is starting to appear is the money that is now due at the “termination of the lease” which can range from $350.00 to $450.00 dollars and up. Nice, this means that when you turn your lease car in, and if you pass the “wear and tear” test, you can now write another check to your friendly dealer.
Now one automobile dealer advertises his cars for 39 months at 12,000 miles per year. Breaking this down to monthly driving easily comes out to 1,000 miles per month. However, the manufacturer’s warranty for bumper to bumper maintenance can expire at 36,000 miles or three years of ownership. This means that you will be driving the “leased car” that you do not own for 3,000 miles beyond the manufacturer’s warranty and are liable for any repairs during that period. You may say that this is not a long time and it is a new car but many leases now run 48 months or longer and the “risk” period is now extended well beyond the 36,000 mile limit. Many dealers now sell their lease clients an extended warranty for an additional fee.
The next little bit of fine print has to do with the mileage charge should you exceed the mileage limit of your lease. To find this amount you usually need a magnifying glass. I have noticed that this charge is now moving up and is now around $0.25 to $0.30 cents per mile for many leases. It may not seem like much but run up an extra two or three thousand miles and you can add this amount to the check that you will write for your termination fee.
Now many leases are now called “ultra low mileage leases” which usually means that you can only drive the car on weekends. Face it, ten thousand miles per year is not a lot of miles in today’s driving world. This averages out to about 833 miles per month or about 28 miles per day on a 30 day month. For many drivers, 28 miles per day may just about cover their commute to work. I suspect that the automotive leasing folks fully understand this and fully expect you to exceed the number of miles in your lease.
Many dealers are now requiring maintenance records from you when your lease expires. Failure to perform the required maintenance can put you in default of your lease and you could be subject to additional fees and penalties. Leasing does work for many people but I would strongly suggest that you look over all the documents and fully understand all the terms and conditions of the lease. If you don’t, you can expect to spend substantially more than you planned and it may not be the pleasant experience that the smiling dealer tells you about.