What You Must Understand Before You Lease

There are two types of auto leases: The most popular and lowest risk is the Closed - End ("net" or "walk away") and the higher risk Open - End ("finance")lease.
 
The Closed End Lease
With the Closed - End lease you return the leased car to the lessor and "walk away." If you have not damaged the vehicle, have not experienced any excess wear and tear and did not exceed the mileage allowance you will have no financial obligation to the lessor. Because the lessor is taking most of the risk your monthly lease payments will be higher. This type of lease is by far the most popular.

The Open - End Lease
With the Open - End lease your monthly payments are lower but your end of lease obligation is determined by fair market value. Using the estimated residual value set by the lessor at lease signing, your vehicle may be appraised or have a fair market value that is considerably less than the residual. You will pay the difference.

The Full Maintenance Lease
Full maintenance lease is not a lease at all. It is a descriptive term that means all mechanical and normal service required during the lease term will be done at no charge. Of course you don't get this premium service free. The leasing company and/or lessor contracts out this service and you pay an additional fee included in your monthly lease payment. The service work is done only at designated locations and at the required time frames.

Have you considered leasing? What swayed you to lease? Why don't you lease?