Plenty of Lease Clauses to Watch Out For & What to Do About Them

1) The Documentation Fee

Potential Savings = $50-100 per lease
Almost every lease company will charge you a ONE-time $50-100 doc fee. So just ask the rep to “make it go away” or to “waive the fee” entirely so that you can close the deal.


2) The Late Charge Fee

Potential Savings = $20 x 60 months = $1,200
To make sure you pay on time, the lease will give you a payment term – usually a “net-10 day” payment term, meaning that you have 10 days to pay the bill once you receive it. This is virtually impossible for most businesses – esp those with tons of regulations on them. The lease companies do this to make sure you pay an extra 10% each month in late fees! Smart, uh?

Again, if you have a dealer who is willing to do an in-house lease, ask them for a “net-30 days” payment term, meaning that you will have 30 days to pay your bill. This alone saves you 10% each month.

If you pay $200/mo and get charged 10% extra each month, then…

3) The Automatic Insurance Surcharge

Potential Savings = $25/mo x 60 mos lease = $1500
The leasing company wants to make sure that you don’t damage or steal their asset (the copier) so they want to make sure that you have insurance to cover any issues that might arise – theft, storms, beating it for jamming all the time, etc.

A few days or weeks after the deal has been closed, the lease company will probably fax you a sheet, unannounced, to be filled out and returned. They want to know who is insuring you for liability and want to be a named “loss payee,” so that if the copier gets broken beyond repair they will still get the money you owe them.

If you don’t reply back in time with that faxed page, then they will automatically add insurance onto your copier bill. (How sweet of them!) And because most Check-Writers aren’t paying attention and just pay whatever bills hit their desk, you could be paying this bogus charge for YEARS! An extra $20-50/mo!! (You should check your current bill to see if you have been paying this already.)

If this has happened to you, call the leasing company today to see if you can get ANY of your premiums back if you can show them proof of liability insurance. They will most likely tell you no, but we’ve heard of a few people get a few hundred bucks back once or twice. Its worth a call.

Either way, on this newest lease, just make sure that you send them a copy of your liability insurance with them as a loss payee. (Just call your ins guy, and tell them to itemize the lease company as a “loss payee” and they will do it and send it right to you. They are used to this and it shouldn’t cost you any more in premiums than it does now.)

If you do an in-house lease with the dealer, just ask him to waive this clause entirely.

4)The “First Week” Pro-Rated Payment

Potential Savings = $200
Don’t sign a lease for a multi-function copier the FIRST WEEK of the month...nor have one delivered. Instead, sign the deal at the end of the month (to get a better deal from a desperate rep) and then have it delivered mid-month or later.

Why? Because you won’t get your first bill for the new lease for another 45 days or so. But many lease companies will try to sneak in an extra, pro-rated payment for that is NOT counted in the original length of the lease (usually 36 or 60 months)!

In other words, you pay an
extra payment that does NOT count towards your contract. Since your billing dept just pays whatever bills on their desk (because they don’t know the details of the deal), the lease companies get away with it all the time!

Note: With these FREE tips, we just saved you over about $3000, but if you learned all of the secrets about leases in Hustlewise, you could save about $7,000…seriously.

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On This Page, You Learned...
1) A handful of "gotcha's" in the lease that can save you thousands.
2) There are many more tricks in those leases that you might want to know about.
4) The end-of-lease options are where lease companies really make their money.

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