How to Lease a Car in California

by Larry Simmons ; Updated July 27, 2017
Before you sign the lease, make sure you know your car leasing rights under California law.

Looked at as a long-term rental with the option to buy at the end of the agreed rental period, leasing a car can be seen as a good way to get a new vehicle every few years without the costs of buying outright. Entering into a leasing agreement for a car in California follows the same general leasing process as anywhere else in the United States. There are a few extra protections extended by California law in lease situations.

Step 1

Set a price range that you can afford to pay for the lease. Choose the make and model that you wish to lease within that range. Make a list containing several vehicles that fit your price range, then find local California dealerships for those car models.

Step 2

Visit the nearest car dealerships and take each of the models on your list for a test drive. Take notes on how the vehicle handles, comfort, visibility and noise level, anything else that affects your driving experience, to narrow your choice to a single vehicle.

Step 3

Find the cost of the car from auto websites that review cars and offer consumer information, including the wholesale price of the car. Look up your local sales tax rate on the State of California website to help determine the final car price.

Step 4

Revisit the dealership that sells the vehicle you wish to lease. Negotiate a sales price for the vehicle with the car salesman, aiming for the lowest price possible, starting from the wholesale car price.Keep sales taxes in mind, as California sales taxes can raise the final cost of the car significantly, ranging from 7.25 percent in areas like Ventura or Yuba counties, to as high as 9.75 percent in Los Angeles county, as of July 2011.

Step 5

Read the lease agreement and make sure that it includes a cooling off period. The cooling off period is a specific period provided by California law for you to change your mind about the lease and terminate it without paying an additional fee.

Step 6

Tell the salesman that you’d like to get the car with a lease. Choose a leasing price that’s within your range rather than the lowest monthly price. Choosing a low monthly price will only up your total lease cost in the long run. Make sure there are no excessive termination fees should you end the lease prior to the stated lease end date. Excessive fees are higher than the cost to recondition the vehicle for sale. Check that the lease includes the termination fee amount before signing. Sign the lease papers and pay the down payment.

Step 7

Drive the car while watching for any severe defects. If so, have the vehicle repaired by the dealer. Report the vehicle to the dealer as a lemon if the dealer fails to repair any problem during the first 18 months or 18,000 miles, whichever comes first. Under the California lemon law, the dealer must replace the vehicle if unable to make repairs.

About the Author

Larry Simmons is a freelance writer and expert in the fusion of computer technology and business. He has a B.S. in economics, an M.S. in information systems, an M.S. in communications technology, as well as significant work towards an M.B.A. in finance. He's published several hundred articles with Demand Studios.

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