Excellent lease advice here! There are only a couple of things that I would add to it.
As VdubDriver already said ALWAYS lease with no money down. (And with current interest rates I'd expand that to purchasing as well) If you have money just stick it in the bank and deduct from it every month as he said. To illustrate this issue better, here is an example (I am using a 48 month balloon loan to figure numbers, actual lease numbers would a be worse actually):
Let's say you buy a car for $25,000 and you either put nothing down and lease for 48 months for $323/month or you put $5000 down and lease for 48 months for $211/month.
The difference between the two monthly payments is $112 which seems like a lot. Multiply that by 48 months (number of payments) that is $5376. So you will end up paying $376 more over the term of the lease by not putting anything down and keeping your $5000 in your pocket. I am not going into details that you can actually earn interest on that $5000 and keep taking $112 out of it every month making the $376 difference even less, or that you could have used the $5000 to pay off a higher interest debt with it.
So if nothing goes wrong with your car during the term of the lease you will be out of $376 more by going this route. that is about $8/month (not counting other interest earning possibilities on your $5000).
Now let's look at the other scenario when your car gets totaled or stolen after a year. After 1 year that car will worth about $20,000 due to depreciation. If you paid no money down, after the first year your payoff would be about $22100. If you put no money down up front then you insurance will pick up the gap (GAP insurance) between what the car is worth ($20,000) and what you owe ($22,100). So the gap insurance will pay $2100 while the rest will be paid by the regular car insurance. You walk away clear and free and with $3656 left of the $5000 that you put aside (you made 12 payments of $112 from it towards the car)
However if you put down $5000 up fron on this car as a cap reduction by the end of the first year your payoff would be about $18,200. Since the car is worth $20,000 at this point and you owe $18,200 the insurance would pay the lender $18,200 and give you $1800. So you would end up with no car and $1800 in your pocket.
So if you compare the two numbers you can see that if your car is stolen or totaled after 1 year you would be losing over $1850 just because you put money down up front. This number would get smaller as the years go by, but you will be pretty much uspide down throughout the entire lease.
The other thing I would want to point out with leases is that in some states (Texas included) they asses sales tax on the ENTIRE purchase price of the vehicle even if you only lease it. And to top it off if you decide to purchase the vehicle at the end of the lease term they will asses sales tax on the residual value and you would have to pay that sales tax again during the financing of the used vehicle. Add to it the lease origination fee, safety deposit and other fees and it turns out that lease is not really the best option in these states. If you still want lower payments you might want to consider the premiere purchase (balloon payment) option in which they still calculate residuals, but you pay it as a loan with regular interest rates, and you have a huge residual balloon payment as the last paymet. At that point you can turn the car back in for a disposition fee (about $250) you can refinance the remainder of the loan, you can sell the car yourself and pay off the loan with the cash or you can trade it in on a new car and get the tax credit (in Texas if you trade in a vehicle during a new purchase you only pay tax on the difference between the two). So I think balloon payment loans make a lot more sense than leases, it gives you the same flexibility and some more!
My last advice is relating to mileage. If you know that you'll drive your car a lot, buy miles up front, they are a lot cheaper up front than at the end of the term. Also if you drive a LOT of miles lease is not your best option probably. If you leased your vehicle thinking that you'd only drive it about 12K miles a year but your driving habits changed (because of job, etc.) then be prepared to pay the mileage overage at the end of the lease. If you set out a 1000 mile/month plan but you actually drive 1500 miles a month, put the money that is needed to pay the extra miles into a savings account at the end of each month so you would be prepared to pay the $2000-$3000 in overage miles at the end of the lease. There is no such thing as a free lunch, so don't expect to get away with the excess miles (however if you turn in the lease at the end of the term and lease a new one from the same brand, chances are you can negotiate the excess mileage down).