Leasing a vehicle can be an exhilarating step, whether you’re a career milestone or venturing into the convenience of leasing for the first time. 

However, my journey with one of the largest leasing companies in Sri Lanka—a prominent global player and a major non-banking financial institution—taught me some hard lessons. 

Here’s what I wish I had known before signing on the dotted line:

Be Wary of Leasing Company Promises

Lesson 1: Research the Leasing Company 

In my excitement, I should have vetted the leasing company properly. 

The car dealer recommended them, but I quickly learned that their friendly staff could turn indifferent once a contract was signed. 

This was especially evident when they unilaterally increased the interest rates on my supposedly fixed-rate lease. 

It is crucial to verify the company and the terms they offer independently—don’t take the dealer’s word for it.

Understand the Fine Print

Lesson 2: Read the Entire Contract 

I should have read the entire contract thoroughly.

It included a clause allowing the leasing company to take possession of the vehicle’s service book, a significant oversight on my part. 

I want you to know that signing the agreement is mandatory for leasing, so please understand every clause before you commit. 

If uncertain, consider saving to buy a car outright or exploring other financing options.

Manage Your Finances Wisely

Lesson 3: Align Payments with Your Cash Flow

I scheduled my payments on the 10th of each month despite receiving my salary on the 25th. 

This misalignment led to hefty penalty charges due to delayed payments.

Negotiating payment terms that match your financial inflow is editable to avoid unnecessary fees and stress.

Avoid Unnecessary Add-Ons

Lesson 4: Decline Additional Services

Leasing companies often offer extra services, like advance deposits into a savings account that they claim will offset future payments.

However, these transactions can usually be opaque, leading to confusion and potential overpayments.

Please be sure to stick to straightforward payment terms without add-ons.

Plan for Upkeep Costs

Lesson 5: Factor in Maintenance Costs

Vehicle maintenance is crucial and can become costly. You are responsible for regular upkeep, including oil changes, filter replacements, and tire rotations.

Moreover, significant repairs, like replacing tires, shocks, or spark plugs, can arise as the vehicle ages.

If leasing payments consume a large portion of your budget, consider the overall financial impact, especially if you lack financial backup.