The biggest problem consumers have with the car leasing process is that they don’t even know what they don’t know. This is because the traditional car leasing process was built on the premise of keeping the consumer in the dark and out of the loop. Becoming familiar with and actively asking the dealer or whoever you’re leasing with the right questions could potentially save you from being severely ripped off. Here are some of the most eff effective things to ask to make you a well-informed consumer:

1. Are there presently any lease specials going on?

There are always leasing specials going on so that carmakers can get rid of cars that are, at that moment, low in demand – but that car that’s having a special could be the car of your dreams. But, like always, make sure to read the fine print. Leasing companies will often not include hidden sales tax and fees in the advertised price and they’ll only show up afterwards on signing. So, make sure you’re getting what you signed up for.

2. What’s the residual value on the car?

High residual values are the bulk of getting a good leasing deal. All residual value means is what the car will be worth at the end of your leasing term. The residual is given to you by the leasing company and is always an estimated percentage or price. Residual matters because when you lease a car, you’re only paying for what you use out of the car – meaning that your entire lease payment is chalked up to what you use, and more importantly, what’s left over afterward. Simply put, the higher the residual, the lower your monthly payment should be.

3. What’s the interest rate?

Interest rate is one of the few things that is negotiable in a leasing contract. The way that interest rate is calculated is that the dealer converts the “money factor” (a really long, vague looking decimal) into a percentage by multiplying it by 2,400. Obviously, interest rate is also based on your credit score, but when carmakers are trying to attract consumers they’ll often give the money factor decimal in place of the actual interest rate to make the rate seem super low. You can calculate the rate yourself and make sure that your interest rate is consistent with your credit.

4. How many miles is on the lease offer advertised?

A lot of the time consumers will see an ad for an amazing deal on a car, but then find out last minute that the offer is only available with a 10,000 mile per year contract, instead of the standard 12,000. Now, the deal isn’t as good because if you exceed that amount of mileage, you’ll be subject to pay around 20 cents per mile over that you’ll (likely) drive.

5. Are there any drive-off fees?

Drive off fees include both fees and a down-payment. Obviously, the bigger your upfront payments are, the lower your monthly costs will be. Beware though, you should never pay more than a $2000 down payment, because the more you pay upfront the bigger your loss will be if you get into an accident and total your car at the beginning of your lease. Better safe than sorry.

6. What fees does the lease include?

Sometimes some of these fees can be negotiated out, while others are set in stone – it’s beneficial to know which are which. As a rule of thumb, acquisition and disposition fees are usually nonnegotiable, but the security deposit may be reduced or even eliminated from your contract, depending on which leasing company you’re dealing with. While removing fees altogether might be a difficult feat, you should still always question them to know exactly what you’re really paying for.

7. What does the leasing contract say about leasing transfers?

Many consumers expect some wiggle room with their leasing contracts today and more and more often want to get out of their leases early or switch cars. While this used to be extremely difficult to accomplish, now most leasing companies do these transfers all the time – but there are of course some exceptions. If you think you might want to leave a lease early, make sure to ask if that’s even a possibility before you sign the contract.


Asking these questions will not only give you a better understanding of the lease you’re signing for, it also demonstrates to the dealer that you are an educated consumer and will know the difference between a good deal and a bad deal – making the chances of you getting ripped off much lower otherwise.

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