Not surprisingly, lease contracts can be complex and confusing. However, there are some fundamental elements of most lease contracts will contain.

Lease Contracts
• Disclosures
• Insurance requirements
• Early termination
• Assumability
• Penalties

Disclosures

Federal law requires that leasing companies disclose certain information to you, so every lease contract will contain a section entitled, “Federal Consumer Leasing Act Disclosures”. Key things to note in the disclosure statement are:

• The amount of cash you will be required to pay at the lease signing
• The monthly payment and how it was determined
• The total value of all payments you will make during the life of the lease
• The mileage allowance
• A description of wear and tear
• Rules related to early termination and/or assumability of the lease contract
• Information about any other fees or charges that will be assessed

Read the disclosure statement very carefully to make sure all of the information is correct. The time to catch mistakes is BEFORE you sign anything.

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Insurance Requirements

Most lease contracts will require that you carry at least a minimum level of car insurance; most states have minimum requirements as well. The levels of insurance required by the lease contract and your state are the BARE MINIMUM amounts you should have.

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Early Termination

Your leasing company may or may not allow early termination of the lease contract. If they do not, then you can expect to be charged significant penalties and fees for turning in the car before the end of the lease term.

If you decide to pursue early termination, though, Lease-X can help you avoid costly early termination fees. When you list your vehicle for lease assumption on Lease-X you attract buyers who are serious about assuming an in-process lease. Once you have completed a lease exchange, you are released from further lease contract obligations, usually saving yourself a lot of money in the process.

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Assumability

Many lease contracts include provisions for assumability of the contract. Some common provisions include:

• The ability to transfer the lease via services such as Lease-X
• The ability to refinance your lease
• The ability to buy the vehicle from the leasing company then sell it to someone else

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Other Penalties and Fees

Other penalties and fees that you’ll see listed in the contract include those for excess mileage and excessive wear and tear.

Excess mileage fees are assessed at the end of the contract if you have driven the car more than the mileage allowance specified in the contract. The fee is usually structured as a cost per mile for every mile over the allowance. Check your contract to determine the exact cost in your agreement.

Excessive wear and tear fees are assessed if the vehicle shows signs of wear beyond what would be expected for the length of time you had the vehicle. Indicators of excessive wear are usually seen in the vehicles upholstery, carpets, door panels and other interior surfaces. External indicators include small scratches, dents or other marks. Many contracts will specifically outline what constitutes normal wear and tear versus excessive wear and tear so check this section of your contract for more information.

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Assuming A Lease

How A Lease Payment Is Calculated

End Of Lease Options

Glossary

Take a look at our leasing guide here.