From the January 1999 issue of Startups

They'll laugh at you if you pull up to that crucial meeting in a dusty, dinged 1983 Junkmobile. At least that's a big concern on the minds of cash-strapped start-up entrepreneurs.

Your other big worry is paying for the gleaming new wheels you covet, especially with the average new car now selling for around $20,000. Put 10 percent down, finance that car over five years and you're looking at a monthly bill of upwards of $350--and that's for the "average" car. Head into BMW territory, and your monthly will near $500. But that's if you buy. Today, about one in three new vehicles moves off a dealer's lot on a lease.

For good reason, too. A recent scan of leases found deals that could put you in a Saab for $298.73 a month. By the time you read this, that deal may have expired--but there will be others with payments of less than $300. There are hitches to leases, though, so check out the resources spotlighted here.


Robert McGarvey still remembers how he got hosed on a car lease in '85, and he's vowed to help the unwitting avoid the potholes he drove into.

Hit The Books

When you shop around for a car to lease, do it aggressively--that's what the consumer gurus preach. For information on new-car sticker prices and specifications, stop by Edmund's Automobile Buyer's Guides Web site (http://www.edmunds.com). Don't miss the section titled "Incentives, Rebates, & Subsidized Leases." Manufacturers often run specials on the cars they sell, and this is where you'll find the latest news.

Get Quotes

How much should you pay, anyway? Let your mouse do the haggling for you by getting dealer quotes online--at no charge. The top services are at:

Many clubs and organizations offer similar deals (American Automobile Association affiliates, for instance). The drill is that you can get one free quote from one dealer near your ZIP code . . . but nothing's keeping you from accessing all three services. Even if you wind up buying the traditional way, quotes from buying services can be useful bargaining chips.

Why So Cheap?

The short answer is that with a lease you pay for the car as you use it; with a purchase, you buy the whole thing. The downside: At the end of a lease you own nothing. Need more detailed answers? Check out these Web sites:

  • LeaseSource (http://www.leasesource.com): With its comprehensive overview of leasing, this analytical tool helps you decide if leasing fits your needs.
  • CarInfo (http://www.carinfo.com/lease2.htmlit leasing or "fleecing?" That's the question this site answers. There are plentiful tips on how to ensure you're not one of the fleeced. Check it out before you lease--before it's too late.
  • "How to Lease a New Car" (http://www.zim.com/ejo/lease.htm): By its own description, this site is an "irreverent, humorous, politically incorrect view of the car leasing experience."

Hard Copy

Get the scoop on the leasing industry's practices in these paperbacks:

  • Look Before You Lease (Buy-Rite, $12.95), by Michael Scott Kranitz
  • What Car Dealers Won't Tell You (NAL/Dutton, $12.95), by Bob Elliston

Know Your Rights

Dealers must offer full disclosure of all crucial lease terms, says the Federal Consumer Leasing Act. Find the facts at http://www.bog.frb.fed.us/pubs/leasing/ or contact the Federal Reserve Board for its free brochure Keys to Vehicle Leasing. Write to the Federal Reserve Board's Publications Services, Mail Stop 127, Washington, DC 20551, or call (202) 452-3244.