ABA Family Legal Guide

Automobiles

Buying, Renting, and Leasing a Car

Car Leasing and Renting

How much does a car lease cost?

The cost of a lease depends upon the specific terms of the contract. Make sure that you understand the terms of your contract, and what the contract says about your responsibilities and the responsibilities of the lessor, including who pays for things like taxes, fees, repairs, and insurance.

You probably will have to pay a security deposit and lease fee for the first month and perhaps the last month as well. You may have to pay an initial capitalized cost reduction. This is similar to a down payment when you buy a car. By paying a large amount up front, you could, in effect, reduce your monthly payments. But by doing this, you lose one of the advantages of leasing: lower up-front costs. Other expenses may include sales tax and title and license fees, though the lessor may pay them. A lease may include insurance. If not, you must provide your own. You might have to pay for repairs and maintenance after any warranty period expires, unless the lessor agrees to pay in your contract. At the end of the lease term, you may have to pay an excess mileage cost if you have a closed-end lease. (Under an open-end lease, the final appraised value of the car will reflect any excess mileage.) Excessive wear and tear also may cost you.