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When leasing a car, is there a rate that I should be asking about, just like for financing. Trying to understand what I need to factor in. - Mary Ann

Answers from the Automotive Experts

Jessie L Thatcher, F&I and Sales Specialist at Reynolds and Reynolds Company  (Retired) When you lease a vehicle you are dealing with add-on rates and not APR. To calculate an approximate rate ask what the add on rate is they are using and do this calculation: EXAMPLE: If the Add on rate is .00335 X 2400 = 8.04 Approx APR. Compare this to the going APR rates available. This will give you a good idea if the rate has been raised to allow for more dealer profit. Be sure you know everything that is included in the payment quote and that it is a final payment including all taxes and fees. Frequently a payment will be quoted and then you find out you have to add on taxes and fees so you end up with a higher payment that you thought you would have. Also be certain you are clear on all money that has to be paid "up-front", before you take delivery. This can include the first months payment, security deposit, license and title fees, taxes on any down payment etc.. Another question to ask is what is your responsibility at the end of the lease? Are there fees for disposition of the vehicle, what are the wear and tear requirements, etc. Don't let just the payment make your decision, look at the entire lease agreement before signing any paperwork. Remember you are leasing not buying the vehicle and will not be building any equity. If you trade every 2 to 3 years, drive no more than 18000 miles a year and keep your vehicle in good condition you are a good candidate for a lease. If you keep your vehicles until they die, drive a lot of miles a year than you might want to consider a purchase over a lease. In a lease you will be in the vehicle for the entire time and it is not equitable to try to terminate early with a trade in.

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