Sample Car Lease Agreement with Explanations

As part of the Consumer Leasing Act, the Federal government has required leasing companies to disclose important information before you sign the lease.

Although the law goes a long way in protecting consumers, the biggest weakness is that it does not require disclosure of the actual Money Factor (interest rate). Instead, it just lists the total amount of interest you will pay over the life of the lease.

The following is the standard form used when leasing a car. See below image for explanations on each section. (Use my Leasing Glossary for any terms you're not familiar with)

  1. Lessee: You are the Lessee
  2. Amount Due At Signing: The amount needed up-front to take delivery of the vehicle (Does not necessarily have to be cash - you can use a trade allowance - see 6b)
  3. Monthly Payment: Shows what your monthly payment is, the number of months, and the total of monthly payments
  4. Other Charges: Additional charges outside of your monthly payment such as Disposition Fee
  5. Total of Payments: Total amount paid during the lease (does not include any refundable amounts or registration/title fees)
  6. Itemization Of Amount Due At Signing:
    1. Amount due at signing: should equal 6B
    2. Itemization: How amount due at signing will be paid - should equal 6A
    1. Adjusted Cap Cost: This is the capitalized cost minus any down payment, trade-in allowance, rebates, or other credits. This is basically the amount that gets financed during the lease
    2. Residual Value: This is what the vehicle is predicted to be worth at the end of the lease. It's also the buyout price if you want to purchase the car at lease end
    3. Depreciation: The amount the vehicle will depreciate during your lease
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    About The Author

    Gregg Fidan is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.