Leasing can be a great way to drive a new car for less—but only if the lease terms are fair. Too often, buyers end up stuck in contracts that cost more than they should. Here’s how to spot the warning signs.
Red Flag #1: High Money Factor
The “money factor” is the leasing equivalent of an interest rate. If the dealer won’t disclose it or it’s significantly higher than what’s standard, it’s a sign you’re overpaying.
Tip: Ask for the money factor and convert it to an APR (multiply by 2400). Compare it to loan rates.
Red Flag #2: Excessive Fees or Down Payment
Some leases come with huge acquisition fees, disposition fees, or require a large down payment. These can mask a bad monthly payment.
Tip: Always ask for a breakdown of all lease fees. Negotiate them just like the price.
Red Flag #3: Too Few Miles
If your lease only allows 10,000 miles/year but you drive 15,000, you’ll pay steep penalties. Mileage overage fees can add up fast.
Tip: Be honest about your driving habits. Pay for extra miles up front if needed.
Red Flag #4: Poor Residual Value
The residual value is the car’s estimated value at lease-end. A low residual means higher payments for you.
Tip: Choose cars with high residuals—this lowers your monthly cost.
At Negotiate4Me, we decode lease terms for you. We’ll tell you if it’s a good deal—or a bad trap.
