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Thanks
to the recently passed Consumer Leasing Act, which became
federal law in January, 1998, vehicle leasing terms
must be clearly spelled out so that the lessee knows
everything that the lease states and requires.
Before
the passage of the CLA, the majority of first-time lessees,
along with some seasoned veterans, never really knew
the total cost, or Gross Capitalized Cost, represented
in their vehicle leases. A lease's Gross Capitalized
Cost includes bank acquisition fee (which generally
falls between $495 and $845), any accessories added
to the vehicle, any negative equity from a previous
vehicle used as a trade-in and the mark-up of the new
vehicle.
You
may find yourself in the position of not understanding
leasing terms and conditions, or you may feel that your
leasing agent is not qualified to answer your questions
regarding your lease. It is your responsibility
to yourself to find an agent that can thoroughly explain
your leasing terms to you. I have found that the
most informed and qualified agents in vehicle leasing
come from respected leasing companies.
When
shopping for a new vehicle, you should also be shopping
for a flexible lease contract. A flexible contract
offers a range of beneficial options that will provide
you the availability of an early "out" (without
major penalty)
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if
your current vehicle needs should change prior to the
maturity of the contract. You do not want to find
yourself married to a lease contract "'til death
do you part." CONSUMER ALERT: the best lease
does not always mean the lowest payment.
Understand
also that a short term lease may not always be the most
intelligent decision if you're planning to purchase
the vehicle at the end of the contract.
A
long term lease, if written correctly, can greatly reduce
your monthly payments and still afford you the ability
to acquire a new vehicle prior to the maturity of the
contract.
Once
again, I hope this information will benefit you in your
vehicle leasing needs. We welcome any and all
questions regarding auto leasing: please send them to
Jackie S. Bertone via email at - jackie@premierleasinggroup.com.
Jackie
S. Bertone is the President of Premier Leasing
Group and is a respected leader in the vehicle leasing
industry for the past 25 years and is a contributing
columnist to THE WALL STREET JOURNAL.
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Reprints
of this article have been approved by the WALL
STREET JOURNAL.
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