Car leasing offers certain advantages and it is an attractive alternative to buying a car. A finance company, also known as a leasing company buys cars from dealerships and leases  it out to you to use for a fixed time in return of your monthly payments. When you return the leased car at the end of your leasing contract, your monthly payments cover the sale price, finance charges and taxes.

• Advantages of leasing a car:
• Lower monthly payments
• Different newer cars
• Fewer maintenance hassles
• Lower upfront cash outlay
• Lower taxes
• No used car problems
• Gap coverage included

However, car leasing requires more personal discipline and commitment than buying as it is rife with many pitfalls.

Concentrate on negotiating the price of the car

To avoid getting into a bad deal of car leasing, concentrate on negotiating the price of the car with the car leasing company.
Lease a vehicle with the dealership rather than with the car leasing company. You should negotiate your car price as if you are the one who is responsible for paying it with the cash from your own hard earned money. Then apply the same negotiated price to the leasing deal. Do not let the salesman know how much you were planning to pay each month on the lease.
Acquaint yourself with the terms like “residual value,” “money factor,” “capitalized cost,” and “capitalized cost reduction”. Knowing the meaning of these terms thoroughly would help you avoid getting into trouble with the deal. You can purchase the vehicle at its residual value when the lease period is over. The residual value should be according to the manufacturer’s suggested retail price (MSRP). Focus on getting a lease contract with the smallest down payment in cash and a very low rate of interest.


Read the fine print in the warranties of the car
To avoid getting into a bad deal of car leasing thoroughly research about your lemon law rights and read the fine print in the warranties of the car you are planning to lease.
Every state has its own “lemon laws” designed to protect consumers from defective cars. If you lease a car that turns out to be a lemon you are covered in most states, except in Alabama, New Mexico, Nevada, Alaska, South Dakota and Colorado. In these states, lemon laws are not expressly extended to lessees. If any protection is afforded, it is only according to the lease agreements and express warranties.

Before you sign the leasing contract:

• Find out if the lemon laws of your state apply to leased vehicles
• Read the warranty on the vehicle thoroughly and check if the manufacturer’s warranty covers the  leased vehicle you are planning to use

Get gap insurance
To avoid getting entangled by ugly problems in case your car is stolen or totaled, get gap insurance. It is highly warranted if the car is expensive.
A gap insurance, lease gap or loan gap comes like a blessing in disguise in a world of carjacks and accidents. If you’re working with a small independent leasing company, make sure to check about gap insurance.

Finance companies provide their own gap insurance in the contract, either by including it as part of the monthly payment or by charging a modest premium.

Advantages of gap insurance:

• Covers the difference if your leased car is totaled or stolen
• Pays if you run into trouble with your cash flow and the loan

Chalk out the route or the places you would need to travel
To avoid getting into a bad deal of car leasing roughly chalk out the route or the places you would need to travel on a sheet of paper. A map of the locality, city, state or the country would help you find the shortest route.
A provision in many leasing contracts restricts the places you can drive. Some forbid you from going out of state or out of the country. If you violate these conditions, you may be considered to be in default, which may mean that you will owe the difference between the balance on the lease and the value of the car. If your leasing company is only a local establishment you may have to put up with more restrictions about the place you may want to travel to.

Calculate how many miles you would drive a year
To avoid getting into a bad deal of car leasing calculate how many miles you would drive a year. The lower are the number of miles you travel, the lower are the depreciation of the lease and monthly payment.

A lease allows you 10,000, 12,000 or 15,000 miles per year and if the lease period is 36 months, you should stay under 30,000, 36,000 or 45,000 miles respectively. In case you travel more than your mileage limit, you will have to pay extra, a minimum of 25 cents per every additional mile. Estimate the number of miles you might travel and it would come handy in negotiating the deal before the contract is written to avoid any angst later.
You can avoid paying for extra miles if you buy the car at the end of the lease by paying the difference between the car’s current value and the total lease amount.

Return your car in good shape
To avoid getting into a bad deal of car leasing, return your car in good shape.

Leasing contracts require you to return your car in good shape. A month before you plan to return the car, make a request to your leasing company to inspect it for wear and tear. If there are any dents or chips, get them fixed ahead and do not let the dealer charge you for them. It’s usually cheaper to get the repairs done on your own. One way to avoid paying for the wear and tear is to buy the car at the end of the lease by paying the difference between the car’s current value and the total lease amount.


Carefully choose the timing for leasing a new model
To avoid getting into a bad deal of car leasing, carefully choose the timing for leasing a new model say, at the beginning of the new model year.

Contrary to what people think, the most expensive time to lease a new car is NOT at the beginning of the model year when vehicles hit the showrooms. Actually, you will get the best deal at the beginning of the new model year because many manufacturers start hiking their prices thrice or four times in a year till a newer model arrives. This is the reason, why a lease is more expensive at the end of the model year than it is at the beginning of it.

Lemon law protection

Your Lemon law protection if you already have bought a Lemon from a used car dealer

•    Visit http://www.yourlemonlawrights.com/States-Lemon-Law.aspx to know more about how your state lemon laws protect you against lemon used car dealers

If you have a problem with a used car deal covered by a warranty or service contract, and the dealership refuses service, contact the attorneys at Krohn and Moss Ltd.

For service agreements administered by an automaker, contact the company's local representative

These representatives are authorized to adjust and approve repairs independently of the dealership that sold the car.

Your Lemon law protection if you already have bought a Lemon from Franchised dealer

You may be eligible for mediation over a Lemon from Franchised dealer through the National Automotive Dealers Association's Automotive Consumer Action Program (AUTOCAP).

•    If the dealer is willing, consider using a dispute-resolution organization to mediate your disagreement over a Lemon from Franchised dealer
•    Some service agreements require this as a first step before suing the Franchised dealer or the manufacturer
•    Read the small print in the sales contract carefully before buying
•    It allows you to determine if you may sue, or if you must submit to arbitration


Your Lemon law protection if you already have bought a Lemon used car from a private seller

If, you already have bought a Lemon used car from a private seller your options for Lemon law protection are much more limited:

•    If your Lemon used car comes with any written guarantees about the condition of the Lemon used car, you can use them as the basis for filing a lawsuit for Lemon law protection
•    You can resolve disputes over for Lemon law protection for smaller amounts of money, say less than $2,000, without an attorney through small claims court
•    The clerk of your local small-claims court can tell you what the exact dollar limit is in your state and provide information on how to file suit for Lemon law protection

How to choose a used car with good reliability history at good price

If you are planning to buy a certified pre-owned/used car from a dealer, a private sale or neighbor, it will do you a world of good to thoroughly read Consumer Reports for a safe used car buying experience.
Trouble-free used cars do NOT come just by a stroke of luck. It involves good research and a keen eye to spot potential problems. Choice of a right and reliable used car can save you angst about possible Lemon law issues sooner or later.

You can easily identify a good used car and eliminate potential lemons if you do not turn a Nelson’s eye for the following:

Have It Inspected by a Qualified Mechanic to avoid a Lemon used car

Before you buy a used car, have it inspected by a qualified mechanic for an automotive diagnostic work.

•    An organization called the Car Care Council www.carcare.org certifies diagnostic shops
•    A thorough diagnosis of the used car costs around $120
•    If you're an American Automobile Association (AAA) member, you could use one of the recommended facilities of the organization

Let the mechanic inspect the undercarriage of the used car on a lift.

•    Kinked structural components and large dents in the floor pan or fuel tank indicate a past accident
•    Welding on the frame suggests a damaged section might have been replaced or cut out during repairs
•    Have the mechanic look for fresh undercoating used to hide recent structural repairs

A dealer lends you the car to have it inspected if you leave identification.
A private seller may not and you need to go the seller’s shop/house for the inspection of the used car.

Know your Lemon Law rights

The Lemon Law can protect you if your used car deal turns out to be a Lemon used car deal.

•    Knowledge of the Lemon Law protection is also part the strategy of buying a safe used car
•    State Lemon Law protection varies greatly for used car consumers
•    New York law requires that used car dealers offer written warranties on all used cars selling at $1,500 or more with less than 100,000 miles
•    In California, it is illegal for a used car dealer to sell a used car with unsafe tires, damaged glass, nonfunctioning lights, or ineffective brakes

Other states offer varying amounts of Lemon Law protection. Check with your state attorney general's office or local consumer-protection agency to learn about the Lemon Laws in your area.

How to choose a used car with good reliability history at good price

If you are planning to buy a certified pre-owned/used car from a dealer, a private sale or neighbor, it will do you a world of good to thoroughly read Consumer Reports for a safe used car buying experience.
Trouble-free used cars do NOT come just by a stroke of luck. It involves good research and a keen eye to spot potential problems. Choice of a right and reliable used car can save you angst about possible Lemon law issues sooner or later.

You can easily identify a good used car and eliminate potential lemons if you do not turn a Nelson’s eye for the following:

The Steering of the used car

With the used car idling, turn the steering wheel right and left.

•    Check that there isn't any slack or ‘play’ or clanking noise in the steering
•    Excess play may indicate a worn steering gear or damaged linkage
•    While driving at normal speeds on smooth, flat pavement, the car should not wander or need constant steering corrections
•    A shaking steering wheel often indicates a need for a wheel balancing or front-end alignment, which are easily remedied
•    However, this may also be a clue that there's a problem with the drive line, suspension, or frame, which could mean expensive repairs are in order

The Suspension of the used car

Check the suspension by pushing down hard on each fender and letting it go.

•    The car should rebound softly, once or twice
•    More than two severe rebounds indicate worn shock absorbers or struts

Drive the used car over a bumpy road at 30 mph.

•    A car that bounces and slams at moderate speeds over common pavement may have a worn or damaged suspension

The Tailpipe of the used car

•    A puff of white smoke upon start up is probably the result of condensation and not a cause for alarm
•    Black smoke after the car has warmed up indicates an overly rich air-fuel mixture, due to a dirty air filter, a faulty oxygen sensor, or a faulty mass-air meter that measures the amount of air intake
•    Blue smoke indicates requirement of expensive repairs
•    Billowing white smoke indicates water in the combustion chamber due to a blown head gasket, damaged cylinder head, or even a cracked block requiring expensive repairs

Step on the Gas of the used car

While driving the used car

•    Engine revving excessively before the car accelerates, indicates a misadjusted or worn-out clutch, or a damaged automatic transmission
•    Though clutch adjustment is relatively an inexpensive service, a damaged clutch or automatic-transmission repair is extremely expensive
•    Knocks and pings while accelerating indicate bad ignition timing or the overheating of engine

Recalls and TSB’s of the used car

Check to see if any recalls were issued and if recall service was performed.

•    The National Highway Traffic Safety Administration (www.nhtsa.dot.gov; 800-424-9393) lists all official recalls
•    Ask the seller for documentation on recall service
•    If any recall work has not been performed on the used car you're considering, it should be done as soon as possible
•    Automakers are required to perform recall service free of charge, regardless of the vehicle's age or how long ago the recall was issued

Check for any TSBs that were issued for the model you're buying and if the seller had any necessary repairs performed.

•    Technical Service Bulletins, or "TSBs," are reports a manufacturer sends its dealers about common or recurring problems with a specific model, and how to rectify them
•    TSBs are not typically safety related
•    Manufacturers are not obligated to notify owners or pay for the repairs
•    An automaker may pay for some or all of the work, if the owner asks them to
•    Lists of TSBs can be found at www.nhtsa.dot.gov/cars/problems/tsb/index.cfm.

Web sites for advice, vehicle history report and information on buying used cars

•    A vehicle history report from CarFax (www.carfax.com) or Experian Automotive (www.autocheck.com) alerts you to possible odometer fraud
•    A vehicle history report reveals past fire, flood, and accident damage
•    A vehicle history report indicates if a rebuilt or salvage title has ever been issued for the vehicle
•    The vehicle identification number (VIN) on the top of the dashboard, near the driver's side roof pillar can access you vehicle history report
•    A vehicle history report would cost $15 and five minutes
•    CarFax's Web site provides advice and information on buying used cars
     From Consumer Reports

How to choose a used car without Lemon Law issues at good price

If you are planning to buy a certified pre-owned/ used car from a dealer, a private sale or neighbor, it will do you a world of good to thoroughly read Consumer Reports for a safe used car buying experience.
Trouble-free used cars do NOT come just by a stroke of luck. It involves good research and a keen eye to spot potential Lemon problems. Choice of a right and reliable used car can save you angst about possible Lemon law issues sooner or later.

You can easily identify a good used car and eliminate potential lemons if you do not turn a Nelson’s eye for the following:

The Interior of the used car

•    A cabin can reveal sagging headliner, cracked dashboard, and missing knobs, handles, and buttons
•    Frayed seat belts or ones with melted fibers because of friction indicate a previous frontal impact above 15 mph
•    Worn pedals or a sagging driver's seat are signs that the used car has very high mileage
•    An air bag warning light that stays lit may indicate that a bag has deployed and been improperly replaced or not replaced at all
•    A mildew smell indicates a water leak
•    Discolored carpeting, silt in the trunk, or intermittent electrical problems are signs of flood damage

Under The Hood of the used car

•    The engine, radiator, and battery should be relatively grease-free with very little or no corrosion
•    Belts and hoses should be pliable and unworn
•    Wet spots indicate leaking oil or fluids
•    Melted wires, tubes, or lines, or a blackened firewall indicate overheating worse, an engine fire

Engine oil of the used car

Let the engine cool and check if all the fluids are clean, filled to the proper level, and do not have leaks:

•    Remove the dipstick from its tube and clean it with a dry rag, reinsert it and remove it again
•    The oil level should be between the ‘full’ and ‘add’ marks
•    Normal engine oil is brown or black, depending on when it was last changed
•    Gritty or gelatinous oil may indicate long stretches between oil changes
•    Thin, frothy oil with the color of chocolate milk points to a blown head gasket or to a severely damaged block or cylinder head
•    Fine metal particles in the oil indicate internal damage or heavy wear

The transmission fluid dipstick is usually located in the rear of the engine compartment.

•    Check it right after the car has been driven for more than 10 minutes
•    With the engine at idle and both the brake and parking brake applied, shift through all the gears
•    Leave the engine running and put it in neutral or park according to the owner's manual
•    Check the level in relation to the dipstick marks
•    Inspect the fluid's condition
•    The transmission fluid should be bright red to light reddish brown,
•    Dark brown, black, or mustard colored transmission fluid indicate serious problems
•    Strong burned smell of the transmission fluid indicates severe wear

The Tires of the used car

•    Wear should be even across the width of the tread and the same on the left and right sides of the car
•    Tires frequently used while over-inflated, tend to have more wear in the middle
•    Tires driven while under-inflated, tend to wear more on the sides
•    Heavy wear on the outside shoulder near the sidewall of the tire indicates a hard driven car from aggressive driving
•    Hard driven car due to aggressive driving has its other parts also wear out excessively
•    Cupped tires, those that have worn unevenly along the circumference of the treads indicate problems with the steering, suspension, or brakes

How to choose a used car with good reliability history at good price

If you are planning to buy a certified pre-owned/used car from a dealer, a private sale or neighbor, it will do you a world of good to thoroughly read Consumer Reports for a safe used car buying experience.
Trouble-free used cars do NOT come just by a stroke of luck. It involves good research and a keen eye to spot potential problems. Choice of a right and reliable used car can save you angst about possible Lemon law issues sooner or later.

You can easily identify a good used car and eliminate potential lemons if you do not turn a Nelson’s eye for the following:

The reliability record

Reliability-history reduces the risk of purchasing a Lemon used car

•    Select models with a good reliability record before you make a choice of the used car
•    The annual subscriber survey for Consumer Reports (CR's) provides exclusive real-world reliability information
•    This reliability information can help you narrow your selections
•    Look into the best and the worst used cars for a quick reference
•    Read the reliability-history charts that accompany most of CR's vehicle profiles
•    The reliability-history charts give you a more detailed information on the key trouble areas in various used car models

Buyer's Guide as the Window Sticker

The Federal Trade Commission requires dealers to post a Buyer's Guide in every used vehicle offered for sale as a window sticker.

•    The Buyer's Guide must contain information if is being sold ‘as is’ or with a warranty, and the percentage of repair costs the dealer is obligated to pay
•    The Buyer's Guide information overrides any contrary provisions in your sales contract
•    If the Buyer's Guide says that the vehicle is covered by a warranty, the dealer must honor that warranty
•    If any changes in coverage are negotiated, the Guide must be included in it before the sale
•    If a sale is designated ‘as is’, it means that the dealer makes no guarantees as to the condition of the vehicle
•    Any problems that arise after you have made the purchase of a used car designated ‘as is’, will be your responsibility
•    Many states do not allow ‘as-is’ sales on vehicles selling for more than a certain price


The Exterior

•    Walk around the car looking for dents, chipped paint, mismatched body panels or parts, broken lamp housings, and chipped windows
•    Gaps between body panels should be of a consistent width and line up
•    Paint over spray on chrome or rubber trim or in the vehicle's wheel wells are signs of body-panel repair

Test for the presence of body filler with a small magnet.

•    If the magnet doesn't stick to the panel, the car may have filler under the paint
•    Some vehicles with plastic or fiberglass panels do not attract a magnet at all
•    A door, hood, or trunk that doesn't close or seal properly is evidence of previous damage and sloppy repair work
•    Inconsistent welds around the hood, doors, or trunk is also evidence of previous damage and sloppy repair work
•    A Certified Automotive Parts Association (CAPA) sticker on a body panel means the part has been replaced