It's the lease you can do.(Auto Leasing - Report)(Buyers Guide)(Industry Overview)

One out of every three new cars, minivans, sport-utility vehicles, and light trucks consumers drive off dealer lots these days is financed by a lease. That's up from fewer than one in ten a decade ago. Clearly, the emergence of leasing marks the biggest change in the way Americans put themselves behind the wheel since the advent of the installment car loan.

It's easy to see why consumers find leasing so seductive. After all, with little or no money down and for a "low" monthly payment, you can drive an automobile you never imagined you could afford to own. Then after enjoying the most trouble-free two or three years of the vehicle's life, you simply bring it back to the dealer and lease another new one. No worries about paying for the upkeep of an older car or haggling over trade-in values. With a lease, the scent of fresh leather upholstery need never leave your nostrils.

But the hassle-free image of leasing that auto manufacturers and dealers are eager to project can be a mirage. We evaluated scores of lease ads appearing in ten metropolitan newspapers across the U.S. and turned up dozens of offers that could mislead or even deceive an inattentive shopper. Our analysis of terms quoted by the behind-the-scenes finance companies that actually write the contracts for 30 of the most commonly leased cars, SUVs, and light trucks revealed that the cost of leasing identical vehicles can vary by thousands of dollars over the life of the lease. (See "Lease Deals" on page 17.) And a special survey we commissioned of a nationally representative sample of 305 recent lease customers showed that a majority had done a poor job of shopping for the vehicle, negotiating the most favorable terms, or steering clear of costly end-of-lease charges.

This is not to say that leasing can't be a satisfying and cost-effective way to acquire a new vehicle, but it's a mistake to think that leasing is easier or less expensive than purchasing. Indeed, for all its superficial simplicity, a lease transaction is a tangle of arcane language and buried details that can ensnare even an experienced customer. If you're considering leasing your next vehicle, here are seven key steps that will improve your odds of landing a good deal.

KEY 1 BE SURE LEASING MAKES SENSE FOR YOU

* A lease comes with lots of limitations on how you can use your new vehicle. Do you drive a lot? Do you load your trunk or roof rack with paint-gouging flea-market treasures? Is your car a magnet for parking-lot dents and dings? Are your kids apt to turn its interior into a finger-painting studio? If so, you face a potentially costly problem trying to live within the tight strictures of a lease. That's because you'll be assessed for what the leasing company determines to be excessive wear and tear to the vehicle when you return it at lease-end. You'll also be charged anywhere from 10 to 20 cents for every mile you drive beyond what your lease allows. Leasing novices are particularly at risk of running up these costs. Nearly one-third of the first-time lessees in our survey were hit either with excess mileage or wear-and-tear charges.

Of course, the value of any car--whether leased or purchased--will be reduced if it is abused or driven hard. But if your driving patterns expose you to these risks, it's better to discover them before you even entertain the possibility of leasing. To determine whether the leasing lifestyle is for you, look ahead to the full term of your lease. How likely are you to change jobs or move to a new home that requires you to rely on your leased vehicle for a long daily commute? Will one of your children begin driving over the coming few years? If so, leasing may not be the right choice.