More Information about the Sample Leasing Form

The top row of boxes on the sample form, page 1, provides a snapshot of what you will pay

  • At the beginning of the lease--The amount you will pay at lease signing or delivery
  • During the lease--Your monthly payment (or your payment for another period)
  • At the end of the lease--Other charges (Note: These charges do not include amounts that may be due if you end the lease early, exceed wear-and-tear standards or mileage limits as stated in your lease, or purchase the vehicle)
  • Over the lease term--Note that the "Total of Payments" is not the sum of the previous 3 items. See "How to use the 'Total of Payments' box when shopping for a lease" below.

Next, the form provides an itemization of the amount due at lease signing. It also specifies how that amount will be paid.

Next, in a series of mathematical steps, the form shows the additions, subtractions, and divisions that determine the amount of the total monthly payment.

The final section provides information on early termination; excessive wear and tear, mileage limits and excess mileage charges, and any purchase option at the end of the lease term. It also directs you to other terms in the lease.

On page 2 of the sample form are the other disclosures that must be provided elsewhere in your lease agreement or in other disclosure documents: a description of the leased property and information on official fees and taxes, insurance, standards for wear and tear, maintenance, warranties, early termination and default, any security interests, late payments, and any option to purchase the leased property before the end of the lease.

How to use the "Total of Payments" box when shopping for a lease. The amount in the "Total of Payments" box on page 1 is determined as follows

    The amount due at lease signing or delivery
  + The total of monthly payments you will make
  + Any other charges not part of your monthly payment
  - Any monthly payments that are included in both the amount due at lease signing or delivery and the total of monthly payments
  - Any refundable security deposit you must pay at lease signing or delivery
  = Total of payments.

The "total of payments" figure tells you the overall cost of the lease if you don't purchase the vehicle. It can be used to compare different leases. However, be sure to note any differences in the length of the lease or in the vehicles when making the comparison. If you think you may want to purchase the vehicle, you can add the purchase-option price to the total of payments and subtract any disposition fee. This amount is the cost to gain full ownership of the vehicle, not including any applicable official fees or taxes at the end of the lease term or the costs of financing. If your purchase-option price is based on the fair market value of the vehicle at lease-end, you would have to estimate this value.

Whether you want to purchase the vehicle or plan to return it, you may want to compare the amounts due at lease signing with the amounts due later (monthly payments and (or) end-of-lease costs). As with any financial transaction, there are often trade-offs between up-front, ongoing, and end-of-term costs. If two leases have similar "total of payments" but significantly different "amounts due at lease signing or delivery," you should also consider the time value of money. Be sure to compare all costs of the leases you are considering before making a decision.

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