Car Lease Contract Pitfall Checklist
A monthly payment is the easiest number in a lease to advertise and the least useful one to compare. Go through these clauses before signing — they determine what the contract really costs from pickup to hand-back.
1. Numbers that build the payment
- Capitalised cost — negotiate it before discussing the monthly figure.
- Upfront payment — a low monthly figure often hides a large deposit.
- Residual value and who sets it — a higher residual lowers the payment but raises end-of-term risk.
- Finance or rent charge, converted to an APR you can compare across offers.
- Term length, and whether it matches how long you actually intend to keep the car.
- Taxes, registration, acquisition and documentation fees — ask for them itemised.
2. Clauses that cost the most at the end
- Mileage allowance and the per-unit overage charge; multiply the charge by your realistic excess miles.
- Excess wear and tear — request the written standard, with examples and measurement rules.
- End-of-lease disposition fee, and whether it is waived if you lease again.
- Hand-back condition process: who inspects, when, and whether you can repair first at your own cost.
- Purchase option price at term end, if you might want to buy the car.
3. Exit and change terms
- Early termination: the exact method used to calculate what you owe.
- Transfer or assumption — can someone else take over the lease, and what is the fee?
- What happens if the car is written off: gap insurance requirement and who is paid.
- Change of circumstances: relocation abroad, long-term sickness, or a change in business use.
4. Running costs and responsibilities
- Maintenance scope — servicing only, or tyres, brakes and wear items too?
- Servicing network and whether you must use franchised dealers.
- Insurance requirements, including minimum cover and who must be named.
- Road tax, registration and any telematics or tracking device costs.
- Fair-use rules for business mileage and drivers not named on the contract.
5. Questions worth asking the dealer or lessor
- What is the total amount I will pay over the full term, including everything?
- Can you show the same deal with zero upfront payment so I can compare honestly?
- What is the cost per mile over the allowed mileage?
- If I return the car with 5,000 extra miles, what exactly do I owe?
- Which of these fees are negotiable, and which are set by the manufacturer?
Note: lease rules, taxes and subsidy treatment differ by market and change frequently. Confirm the current position with the lessor and, where the car is used for business, with your accountant.