Leasing is great…for the dealer! A lease may seem like an attractive option, but be careful! You may get more car at a lower monthly payment, but when you add it all up you will usually find leasing to be more expensive—much more expensive.

Leasing Lingo

Leasing even has its own language:

• Cap Cost—cost of the vehicle
• Cap Reduction—down payment
• Residual—balance owed when the lease is through

The Real Story

Here’s the real story on leasing. You put up a down payment, you pay the monthly payment, you own the car—right? Wrong. Now with a lease.

Instead, after your payments are over you still owe a residual. Even after two, three, or four years of payments, can you still owe a significant balance? Yes!

And watch out if you want to get out of your lease early. It could be expensive. Early pay often comes with a high price.

Final Word on Leases

Some experts suggest that you should check with your CPA or financial counselor before leasing. And never sign a lease (or any other document) unless you full understand exactly what you are signing.