Your Guide to Understanding SUV Lease Deals

Often, appealing offers cloak a net of false charges and fine print. To get a deal that is really good, it should not only have very low monthly fees but you must examine the situation as a whole. Automakers' promotions for leasing a car are designed to bring people to new models but their methods vary. Some packages boast low payments for the first several months but require you to lay out big bucks when you start the "real" job. Others require little up front, however it will cost you more each month. To get the SUV lease deal, you must look beyond headline numbers and understand several major components.

Decipher the Fees: Acquisition and Disposition

Two crucial--and often misunderstood--fees are the acquisition fee and the disposition fee. The acquisition fee is charged by the financing bank to set up the lease. It usually ranges from $400 to $800 and is normally non-negotiable, although some dealers may mark the figure up a little for extra profit. Always go through your lease contract to double-check this amount.

A disposition fee is the charge at end of lease when you return your vehicle. This figure, set by the bank, can sometimes be waived. Strategies to avoid it include leasing another vehicle from the same brand or buying the SUV outright at lease end. And while the dealer provides the financing, understanding and maybe negotiating these charges directly with the bank, as well as the financial covenants of your agreement, may require direct contact. 

The Down Payment Question

For additional cash at the start, also called 'cost capital reduction' you can have a lump sum that in theory would result in lower monthly payments. But this approach is risky. If the SUV is stolen or totaled in an accident or you simply hate it and break the lease in mid-stream, it's all upfront cash which is usually lost. A wiser strategy is to put a modest down payment--or none at all--coming with only slightly higher monthly payments. This maintains your capital and reduces the potential for loss, along with giving you more financial flexibility over the term of the lease.

Understanding "Amount Due at Signing"

This is the total cash you need to put down in order to walk away with the SUV. It is more than just a down payment; normally, it includes several items:

The first month's lease payment.

A refundable security deposit.

The acquisition fee.

Registration, title, and tax.

Be sure to request an itemized breakdown of this amount so you don't get any unpleasant surprises.

Avoid End-of-Lease Bills: Wear and Tear

One of the biggest shocks upon returning the vehicle at the end of a lease is when the leasing company hits you with a bill for excess wear and tear. When you return the vehicle, the leasing company is going to conduct a comprehensive inspection. Damages are subject to charge for dents, scratches, worn tires or damage to you or the upholstery beyond “normal use.” You should:

Be familiar with the leasing terms and conditions for wear and tear from the outset.

Correct any faults of minor consequence yourself before handing back the SUV.

Take photographs of your vehicle at both the outset and as you hand back the lease.

Final Hints for a Wise Lease

Always compare the overall costs of a lease, not just its monthly payments. Add up all 19--monthly payments plus the down payment. What's more, steer clear of leases longer than 36 months. While these entice with lower monthly outlays and sometimes less money down they typically last beyond the manufacturer's bumper-to-bumper warranty period--but not your lender's lien on the car.

Conclusion

In the end, the SUV lease bargain is one which squares with your financial objectives and life style. By analyzing all charges, re-thinking a big up-front payment and considering the end of your lease, you are going to drive out in that new SUV with confidence and a clear view on your money.