Leasing of Motor Vehicles

Consumer Information

To buy or to lease is a question many consumers face when shopping for a motor vehicle. There are advantages and disadvantages. The following will provide you with some basic information you should know about leasing a motor vehicle in comparison to the purchase of a motor vehicle:

A Comparison of Leasing and Purchasing

Leasing

When you lease you do not own the vehicle. A leased vehicle must be return after the end of the lease term (you may purchase the vehicle if you have a purchase option).

The initial cost to lease may include the first month's payment, a refundable security deposit, a capitalized cost reduction (like a down payment), taxes, registration and other fees, and other charges.

Monthly lease payments are usually lower than monthly loan payments because you are paying only for the vehicle's depreciation during the lease term, plus rent charges (like interest), taxes, and fees.

You are responsible for any early termination charges if you end the lease early.

You return the vehicle at lease-end, pay any end-of-lease costs.*

The lessor has the risk of the future market value of the vehicle.

Most leases limit the number of miles you may drive. You can negotiate a higher mileage limit and pay a higher monthly payment. Nearly all leases require that you pay for the mileage that exceeds the lease agreement.

Nearly all leases limit wear to the vehicle during the lease term. You will be responsible for paying for exceeding those limits when you return the vehicle.

When the lease term ends, normally 24 months to 48 months, you may have the option to purchase the vehicle or to lease another vehicle.

Purchasing

When you purchase, you own the vehicle when you complete the financing term.

If you purchase, the initial cost could be the complete selling price, including all taxes and fees. However, if you finance, your initial cost will be a down payment, taxes, title, tag, and registration fees, and any other fees to finance the vehicle.

Monthly loan payments are usually higher than monthly lease payments because you are paying for the entire purchase price of the vehicle, plus interest and other finance charges, taxes, and fees.

You are responsible for any pay-off amount if you end the loan early.

If you wish to purchase a different vehicle, you have the option to sell or trade your current vehicle.

When you purchase a vehicle, you assume the risk of the vehicle's market value when you trade or sell it.

When you purchase you have no mileage restrictions; however, high mileage will lower the vehicle's trade-in or resale value.

When you purchase there are no limits or charges for excessive wear to the vehicle, but like high mileage, excessive wear will lower the vehicle's trade-in or resale value.

When you make the final auto loan payment, you have no further payment obligations.

For additional information on motor vehicle leasing visit the following websites:

En Español

Federal Trade Commission

Florida Attorney General's Office

Florida 's lemon Law

For information on the Florida Lemon Law, please visit the following sites:

Florida Attorney General's Office

Florida Division of Consumer Services