Let's put aside for a minute the fact that sometimes leases can make sense for business purposes because your accountant can figure that one out for you. For now, let's figure the lease will be for personal use. The huge advantage to a lease for personal pleasure is that you can get a lot more car than you could otherwise afford if you had to buy the same car. If you had to buy a new Mercedes for instance, the monthly payments could be over $1000 a month, but sometimes leases will run half of that or less. You still have to do your homework to get the best deal however.

Leases are based on the residual value of the car, just a fancy term for what the car will be worth at the end of the lease. So, basically, the more a car will be worth later on, the cheaper it will be to lease now. So, look for high residual values (duh). The easiest way to find what cars hold their value or not are websites like Cars.com and Edmunds.com. If you hadn't already guessed, the high value cars tend to be the Japanese cars that will actually still be alive in three or four years. However, that doesn't mean you have to get stuck with an econobox for a lease. That kind of defeats the purpose of getting a cool car you could otherwise not afford.

You can still compare the cars you really want, the Mercedes, Porsche, and Jaguars of the world on these sites. You may be surprised that even some of those have pretty decent residual values. Then, it's off to the dealers to start the negotiations. Leases are like any other car transaction which is basically a dealer trying to get your pants off and you trying to keep your belt on. Just like always, never sign any paperwork the first day you go to the dealership, negotiate like crazy, go to several dealers, and be prepared to walk away from the whole deal if the dealer is not willing to work with you.

Once you have done all the negotiations and have found the car you want and the price you can afford (or hope to afford), this is where it gets really tricky. If you think financing a car involves a lot of paperwork, wait until you see the stack of papers for a lease. Don't get intimidated or sign your life away too fast though. Read every line, and if you have any questions, get someone competent to look over the lease for you. A couple hundred dollars on a lawyer may sound like a lot, but if it saves you a couple thousand down the road, it is well worth it.

Once you get the car, keep it up. Remember you are renting something and when you turn it back in they want it back in good condition. Have the oil changed by a shop that will give you a receipt. Wash it once in a while (I know this sounds like common sense for a new Porsche, but I see plenty of dirty ones out there). Especially with leases, there will be all kinds of fine print about excessive mileage and "Wear and tear." Basically, every car is going to have some damage over the years, anything from shopping carts to 18 wheelers running into them. Be sure you know what you are responsible for and how much it will cost to fix. If you turn in a car and the dealer says it needs a new paint job, you may be out many thousands of dollars depending on the car.

Dealers are notorious for finding "Hidden damage" at the end of the lease. I heard from one gentleman who was charged for a new windshield because the dealer told him when they got the car back they used a infrared scanner and found a crack that you couldn't see with the naked eye. I told him to have the dealer show him what they were talking about before paying 500 bucks for a new windshield, but of course, the dealer had already "Turned the car in," whatever that meant, so there was no way to show him. I told the man if he couldn't see the crack, he shouldn't pay for it, but he settled for a couple hundred dollars just to get the dealer off his back. The point being, you better be able to prove the car was in good condition when you turn it in. Have it detailed at a PROFESSIONAL shop and keep the receipt. Have a mechanic check the powertrain of the car. Then, if the dealer tries to pull a fast one, you can refer him to the people just mentioned and say, "Well, it was in good condition when I turned it in, must be one of your guys joyriding that messed it up."

If you are just trying to save money, a lease is not right for you. Buy a used car (See my article!) But remember, I am about the real world. Many people, especially the young want to show off their wealth, or assumed wealth by driving a fancy car. If you simply can't afford that Rolls Royce that you have your eye on, you might be able to at least rent it for a while. You just have to decide what you are willing to give up in order to look cool. Remember what I always say. If the joy you get from a product is greater than what you have to give up to get it, enjoy!