Sélectionner une page

Open navigation Main Menu Mortgages

refinancing your existing loan Finding the perfect lender Additional Resources

Looking for a financial advisor? Take our 3 minute quiz and match with an advisor today.

Main Menu Banking

Calculators to compare accounts Use the calculators and get assistance from Bank reviews

Looking for a financial advisor? Do our 3-minute quiz and match with an advisor today.

Main Menu Credit cards

Compare according to category Compare by credit needed Compare by issuer Get help

Looking for the perfect credit card? Narrow your search with CardMatch(tm)

Main Menu Loans

Personal Auto Loans and Loans for Students Loan calculators

Find an individual loan in just 2 minutes or less. Answer a few questions to be offered loans, with no impact to your score on credit.

Main Menu Investing

Best of Brokerages and Rob-Advisors. Learn the basics Additional sources

Looking for a financial advisor? Try our three minute test and then match up to an adviser today.

Main Menu Home equity

Find the most competitive rates Lender reviews Use calculators Knowledge base

Looking for a financial advisor? Do our 3-minute quiz and connect to an adviser today.

Main Menu Real estate

Home selling or buying homes Finding the right agent sources

Looking for a financial advisor? Do our 3-minute quiz and then match up with an advisor today.

Main Menu Insurance

Car Insurance Homeowners insurance Other Insurance Company reviews

Looking for a financial advisor? Do our 3-minute quiz and then match up with an advisor today.

Main Menu Retirement

Retirement plans & accounts Learn the basics Retirement calculators Additional Resources

Looking for a financial advisor? Take our 3 minute quiz and match with an advisor today.

Search open Close search


9 traps in car leasing that you should stay clear of in Part Of Leasing a Vehicle In this series Leasing a Vehicle

Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by offering interactive tools and financial calculators as well as publishing original and objective content. This allows users to conduct research and compare information at no cost to help you make financial decisions with confidence. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that are advertised on this website are provided by companies that compensate us. This compensation can affect the way and when products are featured on this site, including for instance, the order in which they may appear within the listing categories in the event that they are not permitted by law. Our mortgage or home equity, and also other products for home loans. This compensation, however, does have no impact on the information we provide, or the reviews that you see on this site. We do not cover the vast array of companies or financial offers that may be available to you.


You are on this Page on This Page

Prev Next

prostooleh/Getty Images

6 min read The book was published on May 5, 2022.

Writen by Jackie Lam Written by Contributing writer

Jackie Lam is a contributing writer for Bankrate. Jackie write about car loans.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers gain the confidence to control their finances through providing concise, well-studied information that break down complex subjects into digestible chunks.

The Bankrate promise

More information

At Bankrate we strive to help you make better financial choices. While we adhere to strict journalistic integrity ,

this post may contain the mention of products made by our partners. Here’s a brief explanation of how we make money .

The Bankrate promise

Established in 1976, Bankrate has a long track experience of helping customers make wise financial decisions.

We’ve earned this name for more than four decades through simplifying the process of financial decision-making

process and giving people confidence about the actions they should do next. process and gives people confidence in the next step.

You can rest assured that we’re putting your interests first. All of our content was created by and edited by

They ensure that what we write ensures that everything we publish is accurate, objective and trustworthy. We have a team of loans reporter and editor focus on the areas that consumers are concerned about most — the various types of loans available as well as the best rates, the best lenders, the best ways to repay debt, and more — so you’ll be able to feel secure when investing your money.

Integrity in editing

Bankrate follows a strict standard of conduct, which means you can be confident that we’ll put your needs first. Our award-winning editors and journalists create honest and accurate content to assist you in making the right financial decisions. The key principles We value your trust. Our aim is to provide readers with truthful and impartial information. We have editorial standards in place to ensure this happens. Our editors and reporters rigorously check the accuracy of editorial content to ensure the information you’re receiving is correct. We keep a barrier between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence Bankrate’s editorial team writes on behalf of YOU as the reader. Our aim is to provide you the most accurate advice to aid you in making informed financial choices for your own personal finances. We adhere to strict guidelines in order to make sure that the content we publish isn’t in any way influenced by advertising. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. Therefore, whether you’re looking at an article or review, you can be sure that you’re getting reliable and dependable information.

How do we earn money?

There are money-related questions. Bankrate has answers. Our experts have helped you understand your money for more than four decades. We are constantly striving to give our customers the right advice and tools needed to make it through life’s financial journey. Bankrate adheres to strict standards standard of conduct, which means that you can be sure that our content is truthful and precise. Our award-winning editors, reporters and editors create honest and accurate information to assist you in making the best financial decisions. Our content produced by our editorial staff is factual, objective and is not influenced through our sponsors. We’re open about the ways we’re in a position to provide quality content, competitive rates, and useful tools to you by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the promotion of sponsored goods and services or through you clicking certain links posted on our website. This compensation could influence the manner, place and in what order items appear in listing categories in the event that they are not permitted by law. This is the case for our loan products, such as mortgages and home equity and other home lending products. Other factors, like our own proprietary website rules and whether the product is available within the area you reside in or is within your own personal credit score may also influence how and where products appear on this site. While we strive to provide the most diverse selection of products, Bankrate does not include information about every credit or financial product or service.

Leasing a car may seem to be a great idea at first blush, but often leases are accompanied by a myriad of caveats and pitfalls that the drawbacks outweigh any benefits associated with the arrangement. Even if you’re considering leasing a car instead of owning you should still be vigilant about what you are getting into. In contrast to owning a car which you could sell if you’d like, leasing leaves you with legal binding contractand you’ll have to hold onto the car until the lease expires. There are nine traps that you’re at risk of falling into when leasing the car. 1. Limitations on mileage that could be costly Many leases include a cap on the number of miles that you can put on the car each year. As a reference point, U.S. drivers average 13500 miles a year, according to the Federal Highway Administration. Certain leases for cars, particularly those touting low monthly payments with annual mileage caps of 10,000 miles or less, says Matt DeLorenzo, a senior managing editor at Kelley Blue Book. The type of car you’re driving, you should expect to be charged a penalty that ranges between 10 and 25 cents per mile if you go over your annual limit. The higher the price tag of the vehicle and the more expensive the fine. If your fine is 25 cents for each mile, and you go over the limit by 3,000 miles over a year, you’re looking at an astronomical $750 in additional cost. Consider this: If you’re thinking of going down the lease approach, determine how many miles you average per year to ensure you know how much it will run if you go over the limit of mileage. 2. Early termination costs Should you decide to terminate your lease early it could be necessary to pay a pretty penny to be able to exit the lease. It’s contingent upon the lease terms, but you might be required to pay the difference between the amount the car is depreciating and what you have already paid for it. In some cases, this charge might be many thousand dollars. For instance, suppose you lease a $40,000 car. In the course of three years you’ve spent $18,000. But, the vehicle has depreciated by $21,000. If this is your situation, you could need to pay the difference between what you’ve already paid, which is $18,000 and the amount that the vehicle has depreciated by, $21,000. This means you’d be in the pocket of the sum of $3,000. Early termination costs could also include taxes as well as a fee , that helps to offset the costs to the lender to purchase the vehicle. The borrower is also responsible to pay any late charges, parking tickets and any remaining monthly payments. Takeaway: Read the fine print on early termination clauses, which DeLorenzo recommends. « Find the exact amount you’ll need to pay if your lease doesn’t run to its end, » he says. 3. Low residual value. The residual value is how much the car will be worth at the conclusion of your lease. Let’s say the lender believes that the car you’re leasing today could be valued at $15,000 in three years’ time. Your monthly payments will be calculated to cover that $15,000 loss in value and so a lease for 36 months amounts with monthly installments of $416.67, not including interest or any taxes and charges. Takeaway: Residual value is the agreed-upon value of the car at the time the lease expires. The residual value also includes depreciation. 4. A price advertised that demands the payment of a large down-payment. If you see a monthly lease cost advertised as under $200, be sure to do your homework and understand what you’re being enticed by, says DeLorenzo. In most cases, these prices are equivalent to huge down payment. You should be aware of the amount you’re requested to deposit to be eligible for such low monthly costs. « A $5,000 upfront fee for a lease of four years increases by more than $100 the advertised monthly installment, » DeLorenzo says. The lesson: There’s usually an issue if a lease comes with lower monthly payments: an enormous down payment. 5. The monthly payments for purchasing vs. leasing Some dealerships may be trying to lure you into a lease by comparing the monthly payment for each, and what the monthly payment could be if you chose the leasing route. When you purchase an automobile, you are entitled to keep it until the time you have reached the . When you lease, you must to return the vehicle. Don’t fall for it when dealers try to make comparisons between apples and oranges and tell you that it’s more economical it is to lease an automobile. 6. Doing nothing to reduce the cost of the vehicle Just because you are leasing does not mean you don’t have to worry about the price tag of the vehicle. It’s still a matter of concern, as the cost you pay to lease the car is mostly contingent on the cost of the car and its depreciation rate. What you should take away is that the price and worth of your vehicle do matter when leasing. 7. Fees at the start and at the end of the lease. Before signing a lease make certain you are aware of charges. These might include: Acquisition fees: Also called an administrative fee or bank fee it is a one-time fee that lenders charge to set up the lease. The amount can run anywhere from $400-$900. Taxes on sales and licenses are not included in your monthly installment depending on the state you reside in and your specific contract, so be sure to review the specifics. Cost to buy-out when your lease is over, you will be able to buy the car rather than returning the vehicle to its lender. Costs associated with the end of lease If you choose to sell the vehicle to the lender, you’ll be accountable for paying end-of-lease fees which is also known as a disposition fee. This might include vehicle inspection cleaning and reconditioning, storage costs, transportation and administrative charges. Wear-and-tear fees: You might be charged for the loss of equipment or if the vehicle suffers wear and tear that isn’t covered by the agreement to lease. « Check out the specific language on what constitutes ‘normal wear and tear’ when lease end, and what your responsibility is for repairs or maintenance after the time of lease termination » DeLorenzo says. It is important to note that the expense of leasing a car is beyond the monthly installment. Review all of the costs involved before signing on the line and that includes any that might come with breaching the terms of the lease. 8. A longer-term lease that gives you a lower monthly payment Let’s say you contact the lender to get your monthly payment down. They return, letting you that they have discovered that they could lower your payments by extending the lease. But the truth is that you’re not saving any money. Although a longer lease period can mean you will pay less per month, you’ll also incur more interest throughout the lease. Beware of being deceived by a lower monthly installment that comes with an extended lease term. If the lender suggests stretching the term, you’ll pay more interest over the long run. 9. The money element While there’s no APR with regards to a car lease, there are financing charges. These are known as the « money factor. » The money factor is a lot like an interest rate, and is the determining factor for how much you’ll have to pay for financing charges. It is as you’d expect: the higher the money factor, the more you’ll have to pay. Contrary to interest rates that are based on the money factor, it is calculated as a decimal. To determine the cost of your financing as a percentage, multiple 2400 times the amount of money you have to pay by. So, if your money factor is .0025 6.5%, that’s 6 percent. Takeaway: When shopping for a lease on the car, inquire about what the cost factor is. Next steps Protect yourself from falling into one of these car leasing traps with these simple steps: Know your requirements: When deciding if a lease on a car is the best option for you, think about how many miles you drive every year, what you are able to afford, and how leasing a car is compatible with your needs in lifestyle, financial goals and lifestyle. Examine your credit score: Going over your credit file prior to receiving offers could help you have more leverage to negotiate the terms you want. Compare rates: To find the best rates, talk to lenders about their terms based on your credit. Negotiate as much as you can do: Although there are things you can’t negotiate, such as the purchase fee and the residual value, you may potentially negotiate the disposition fee or buyout price. Be sure to read the fine print There may be hidden charges and limits to your lease that might not be revealed when you’re shopping around. Before signing on your dotted line make sure to study the fine print. It is crucial to understand how leasing a car works and being aware of the expenses, you can steer clear of common lease traps, and also save cash. In addition, you should be alert to leasing pitfalls to steer clear of it is always recommended to plan to plan ahead to ensure that you enter the leasing office with confidence and knowledge. Find out more


Written by Contributing writer

Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans.

Editor: Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping their readers to manage their finances by providing concise, well-studied and well-informed data that can break otherwise complex topics into manageable bites.

Auto loans editor

The next part of leasing a Vehicle

Auto Loans

3 min read May 11, 2022

Auto Loans

4 min read on Aug 22 2022

Auto Loans

5 min read Mar 03 2023



Legal Cookie settings Do not share my information with anyone else.

How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the promotion of sponsored goods and services or when you click on certain links posted on our website. Therefore, this compensation may influence the manner, place and in what order products appear within listing categories, except where prohibited by law. This is the case for our mortgage home equity, mortgage and other home lending products. Other elements, like our own proprietary website rules and whether or not a product is offered in your area or at your own personal credit score could also affect the manner in which products appear on this site. While we strive to provide an array of offers, Bankrate does not include information about each financial or credit item or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |


(c) 2023 Bankrate, LLC. The Red Ventures company. All Rights reserved.

If you liked this information and you would such as to receive additional information relating to payday loans online same day deposit near me (https://buylq.site) kindly browse through our web-site.