After going through all the terms and conditions the moment of truth finally arrives with your new car contract right in front of you. By now, you sill have negotiated all the major terms with the dealer and now all you have to do is to sign on the dotted line. But reviewing the contract is a must before you sign it.
Your lease contract is a long document packed with fine print. There can be any hidden or misprinted clause that may haunt you later. Most of the contracts are in a standard form that is the same at all dealerships. It is not actually the language in the contract that is your concern. Instead, it is the numbers in the boxes that you need to review carefully.
Leasing is all about your monthly payment. Double check the estimated monthly payment by using a leasing calculator. Estimate the residual value of the car after the end of your lease term. You can also consult the dealer or finance manager at the dealership for finding this. Most of the leased cars lose 50 percent of their values after three years of the lease.
Review the following elements that make up the key monthly lease figure:
- Capitalized cost of the car
- Drive-off payment (a combination of several fees)
- Allowed mileage (the miles allowed for the length of the lease, which is usually 12,000 per year)
- The term of the lease (the length of the loan in months)
Controlling these figures means controlling your cost which is your monthly payment. Also, factor in any rebate or trade-in. See all the numbers on the document and review all the boxes in the contract and see if the dealer has added to or changed any of them. Some dealers might insert questionable fees in a contract to increase profits. These ‘extras’ can be awkward particularly if you only discover them when reviewing the contract. But if everything is according to your numbers then it is a simple matter of verifying the figures in the contract and double-checking the length of the lease.
