We've all seen the stereotypical care dealer. You know; the one in the movies and jokes who will go to any length just to make a buck. Sadly, these shady characters are all too common in real-life purchasing and leasing scenarios as well. Unwitting consumers can get so caught up in the new car excitement, and so overwhelmed trying to understand the terms and processes, that they rely on the dealer's "expertise" instead of making their own informed decisions.

Automobile dealers and leasing agents do have a few tricks up their sleeves to pull in more profits. Watch out for these tactics, and you can save yourself a bundle:

"Leasing is Better Than Buying"

The premise behind marketing is to use the emotion of the buyer to sell a product. Automobile dealers know that most consumers don't have a lot of spare cash and are nervous about parting with their disposable income. Therefore, they lure customers with the promise of lower monthly payments, and convince them to sign long term agreements. What consumers fail to realize is that these contracts can stretch the commitment to five years or even more. The payments are lower, but the term is much longer. These contracts can be dangerous for a couple of reasons.

First, possessing a vehicle for a longer period of time naturally means that there will be more mileage on the car at the end of the lease term. It's easy to put 80,000 miles on a car over the course of five years, but even this moderate number exceeds the 15,000 per year mileage limit that is written into most leasing agreements. Many consumers don't fully appreciate their obligations to pay for ever mile over the limit. At 20 cents per mile, those extra 5,000 miles can add up to a hefty bill at the end of the lease. Another disadvantage to an extended lease agreement is wear and tear that will inevitably affect your vehicle. Many warranties cover three years, making you entirely responsible for any repairs or damages that are incurred over the remaining two years.

"Low Lease Rate -- Only 3 Percent Financing!"

Always read the fine print in every lease advertisement. The dealer or leasing agent is not quoting the actual lease rate that you will be paying, but simply giving you the lease money factor. It's similar to an interest rate, but not exactly the same. The lease money factor is used to determine your monthly payment, but you can calculate a more accurate rate by multiplying the money factor by 24. For example, the "low" lease rate of 3% is actually the money factor. When multiplied by 24, the product is 7.2%. This is the annual interest rate that you may unwittingly agree to pay on your lease contract.

"No-Hassle Early Termination"

Please. There is no easy way to terminate a lease. It is a legal agreement, and you are bound by law to meet your obligations. Even though dealers are well aware that consumers' situations can change and some leasers will want or need to opt out early, there is no easy way. When you sign a leasing agreement, you are required to make monthly payments for the remainder of the lease term, and there is little chance of getting out early. Lease contracts impose hefty financial penalties upon those who default on their payments or terminate the agreement before the end of the scheduled term.

Leasing agents and car dealers use these "bat and hook" tactics every day. How can you protect yourself from walking in to one of these traps? Knowledge is always your best defense, so take the time to learn as much as you can about the leasing process. Become acquainted with the terms used by dealers. Do your own estimations to determine what your monthly payments will be, and then bring the calculations with you. Crunch numbers with your dealer to be sure that you clearly understand how he or she has arrived at the monthly lease payment.

Don't sign anything until you have a clear understanding all the terms, and be certain that your dealer's numbers are close to or the same as yours. You're in charge, so don't let your dealer pressure you into signing.

Knowledge is power, particularly when you're dealing with slick sellers. With the right amount of confidence and education, you will have the upper hand in the situation, you will be able to avoid falling for the typical tactics, and you will ultimately negotiate the best possible deal.

About the Author

Writer Eleora Knoff contributes to several Internet sites, on online shopping and home shopping subjects.