Auto Lease Agreement - Free Download
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Indiana Department of Financial Institutions
A Mini-lesson for:
secondary school teachers
adult and community educators
students and consumers
This mini-lesson includes learning objectives, background information, discussion questions,
activities, checklists and sources of additional information.
◆ define leasing terms
◆ discuss advantages and disadvantages of leasing
◆ review the steps in leasing an automobile
◆ list and describe possible end-of-lease costs
The Leasing Question
Leasing became popular when businesses wanted to operate automobile fleets while avoiding
the high cost of ownership and maintenance. When individual leasing developed, consumers
were faced with a new market question: to lease or not to lease.
Automobile leasing is not a simple matter. Cars lose value or depreciate over time. When you
lease a car for two years, you are paying for two years of depreciation in monthly payments plus
interest. At the end of the lease, the automobile can be either sold to you or someone else for
its value at that point. There is no ownership, you simply pay for the use of the automobile. The
manufacturer's warranty covers most repairs; but all maintenance costs and insurance are your
The Regulation M from the Federal Reserve Board, effective January 1, 1998, requires
disclosure by leasing companies of specific information and provides consumers with a
description in writing of the lease's financial details. A model disclosure form is available.