Just because you are leasing a car instead of buying, don't assume that you don't have to be on your toes. You should still be skeptical about promises that sound too good to be true. Leasing is still a financial commitment and many consider it to be more responsibility. You are still signing a binding contract, so you must be vigilant in negotiating and checking all the terms. When you buy a car, you can sell it if you don't like it. When you lease a car, you are stuck with it throughout the lease term. 

Here are the top 10 booby traps when leasing a car:

1. Mileage meltdowns

When leasing a vehicle you are allowed a certain number of miles each year. Often dealers will offer a low-cost lease, but set the mileage allowance low - like at 10,000 miles per year. If they charge 10 cents to 20 cents for every mile you go over and you drive 13,000 miles a year, it will add up. For a three year lease with a 20 cent per mile overage charge, you will owe the dealer $1,800 for those miles. That figures in at an extra $50 a month.

2. Early-termination tango

Dealers will lure customers into a new lease by saying that you can get out of your existing lease early. You can, but you will pay for it.

For example, you lease a $20,000 car. In two years, you've paid $2,400 in payments. The car has depreciated to $16,000. To terminate the lease, you will have to pay the difference between the $2,400 you have already paid and the amount of depreciation ($4,000). You will owe $1,600.

Some leases may require that you pay all of the remaining payments. A dealer may suggest that the payments just be wrapped up into the new lease. This means that you will end up paying much more.

3. Residual-value runaround

The residual value - how much the car is worth at the end of the lease - is a critical factor in leasing a car. For instance, the dealer figures that the car is worth $20,000 will be worth $10,000 in three years and calculates your monthly payments to cover that loss in value. Different lenders will calculate the residual values differently.

A lower residual value leaves you with a higher monthly payment. With a $15,000 residual value on a $25,000 car, you will have to cover the $10,000 difference. In a 36 month lease, your monthly payments would be $277.77, plus any interest, taxes and leasing fees. If a different lender figures that the car will only be worth $13,000, your monthly payments jump to $333.33. A lower residual value is good if you decide to purchase the car at the end of the lease. Then you will pay the residual value, plus any purchase-option fee.

4. Down payment double talk

Many leases that are advertised with very low monthly payment are hiding a huge down payment in the fine print. You should keep in mind that your monthly lease payments aren't the total cost of your lease. Factor in the down payment. If you put $4,000 down on a 36 month lease, your real cost is around $111 more than your monthly payment. A dealer may set up your monthly payment incredibly low and just raise up the down payment requirement. If you make big enough a down payment, you won't have to make any monthly payments at all.

5. Purchase-price parade

Some dealers will try to get you into a lease contract by comparing the payments you would make under a lease with the payments you would make to purchase the car. Keep in mind that the main difference is that at the end of the purchase term, you own the car. When the lease ends, you own nothing.

6. Price doesn't matter ploy

Even though you aren't buying a car, just leasing, you still have to worry about the price of the car. Your monthly payment is based on the price of the car. A car selling for $24,000 has a capitalized cost of $24,000. Its residual value is $12,000 in three years. Your monthly payments will be $333 to cover the depreciation. But if the cost is $22,000 instead, and the residual value remains the same, your monthly payment becomes $278 a month. Each month you will save $56. Make extra sure that the capitalized cost is not more than the MSRP.

7. The fee focus

You need to know the amount of fees that you will pay in addition to your monthly payments. These fees can include acquisition, purchase option and disposition fees. Acquisition fees, or document fees, are charged at the beginning of your lease. They usually total to $500. A disposition fee is charged upon the return of the car. This covers the dealer's cost to dispose of the car. These fees can be several hundred dollars. The purchase-option fee is the amount it would cost to purchase the car at the end of the lease. The amount varies and depends on the residual value. These fees are one time, but they still affect the overall cost of the lease. You should negotiate everything and consider them in your decision.

8. Hidden-cost hideaway

Don't assume that the monthly lease payment that you are quoted is what you will be paying. It could have added sales tax or license fees. Ask what other ongoing charges will apply, so that you don't have a shock when the first payment is due.

9. Term trick

A dealer can get you to accept their deal at a higher price by simply manipulating the term of the lease. For example, you are looking at buying a car with a sticker price of $25,000. You haggle down to $22,000 and the dealer sets the residual at $12,000. That means that your 36 monthly payments will be $277.77 plus any taxes, interest and fees. But you try to get the price down by telling the dealer you can only afford to pay $250 a month. He goes and talks to the manager for you and says he can do it. But the term of your lease has now gone up to 40 months, and he probably won't point this out. You haven't saved anything.

10. Interest rate confusion

There is no annual percentage rate for a lease. No matter what. If you are told there is, it is either illegal, inaccurate or not really APR. The dealer may try to confuse you about APR and the "money factor."

The money factor is similar to an interest rate, but it isn't quite the same. It determines how much you will pay in finance charges over the life of the lease. The higher the money factor, the more you will pay. It is written in a decimal such as .00260. You can convert it to an equivalent interest rate by multiplying it by 2400.

An untrustworthy salesperson may try to tell you that you have an APR of 2.6 on your lease. Then he applies the money factor of .00260. You think you are paying 2.6% interest. But you aren't. Multiply .00260 by 2400 and you will find that you are paying 6.24% interest equivalent.

You can take the amount back the other way too. If a dealer tells you that they will equal the rate you've been offered by a bank, take the rate and divide it by 2400. For example, if your bank says that you can have a rate of 6%, divide it by 2400 and you have a money factor of .0025. Then ask the dealer what the money factor is and if it is higher than .0025, then you know that the equivalent interest rate is higher than 6%.