 TITLE: How to Negotiate a Car Lease CONTENT: Understand How Car Leases Work\n------------------------------\nCar leases are sometimes a better deal for drivers who want the latest-model cars but need a lower monthly payment. You may also be able to put down lower down payment and get full coverage under the manufacturer's warranty.\nTo negotiate a car lease, you'll need to understand the process and relevant terms that may come up when speaking with the car salesperson. Think of a lease as a long-term rental—you pay to use the vehicle for a specific time period and then buy the car or return it when the lease ends. Most leases last two to four years and allow you to drive 10,000 to 15,000 miles per year. If you exceed the allotted mileage, a per-mile fee is assessed.\nThe dealership will offer a lease agreement that details the term and annual mileage limitations. It will also include the following:\n*   The current value of the car and the projected value when the lease ends.\n*   How much money you need to put down to begin the lease.\n*   The rent charge or \"money factor,\" which is comparable to the interest rate you'd pay to finance a vehicle.\n*   Penalties for delinquent lease payments.\n*   Any fees you are responsible for when the lease ends.\n*   Early termination fees.\n*   Fees for normal wear and tear and potential additional charges for excessive damage.\nWhen you read through your lease agreement, you're likely to encounter some unfamiliar phrases. Study the following definitions to better equip yourself when negotiating your lease:\n*   **Residual value**: The projected value of the car at the end of the lease. This amount is calculated using industry data and factors in vehicle depreciation.\n*   **Gross capitalized cost**: Equivalent to the selling price of a vehicle. It is sometimes referred to as the market value.\n*   **Acquisition fee**: Dealerships charge this fee to set up the lease. According to Edmunds, you can typically expect to pay $395 to $895 upfront or roll it into the monthly lease payment.\n*   **Cap cost reduction**: Anything that reduces the amount financed under the lease agreement. Capital cost reductions can include rebate amounts, payments or trade-in credits.\n*   **Buyout price**: What the dealership would charge if you wanted to buy the car at the end of the lease term.\n*   **Disposition fee**: This covers the cost of cleaning the vehicle, preparing it for the market and selling it after you return it.\nNow that you know how leases work and what to expect when reviewing the lease agreement, the next step is to understand what you can and can't negotiate. END