Baic glossary of auto leasing

Leasing Glossary
In order to obtain a lease very well, you need to understand leasing jargon. Read this leasing glossary to get an overview of the basics: Acquisition fee: fee charged by a leasing company to begin the lease. Not all leasing companies charge a fee to purchase, but if the departure tax of about $ 300 and rarely negotiable.

Capitalized costs: the entire sale price of the vehicle lease This also explains the tax, title, license fees, acquisition fee and Possibly optional insurance and warranty items you choose to have the lease and pay overtime Rather Than in advance.

Depreciation fee: Part of the responsibility for payment of rent per month and represents the loss in value of the car at the end of the lease. price list of vehicles with lower expected residual value at lease end is divided by the number of months in the lease to allow for depreciation. Suppose you decide to rent a vehicle with a retail price of $ 23,500. Leasing Company believes that after three one-year lease, the vehicle will be worth 35% of its original retail value, or $ 8,225. The difference, $ 15,275, divided by the number of months in the lease, 36 months, gives us the right to depreciation ($ 424)
GAP insurance: Pays off rental balanced if the vehicle is destroyed, stolen or anything.
Initial fees: All fees due at the beginning of the lease. They are usually a guarantee, acquisition costs, first monthly payment, taxes,deposit of security and title fees.

No transport allowance: The maximum number of miles a rented car can be run a year without incurring an excess mileage penalty. A typical mileage of 12,000 to 15,000 miles per year, although this is negotiable with your leasing company.

Mileage charges: A penalty that you incur if you exceed your mileage allowance on a leased car. Examples of driving costs 10-20 cents per mile excess.
Money-factor:A fractional number, such as 0.00043, used in calculating your
monthly lease payments. You can get a rough estimate of the annual
percentage rate on your lease by multiplying the money factor by 2,400. If
a dealer quotes a money factor such as 3.4 than you can get the equivalent
APR, 8.16, if you multiply by 2.4.
Residual value: the residual value of money to the leasing company says your leased vehicle is worth when the lease expires. The higher the residual value to lower monthly payments but a higher-end lease acquisition costs, if you want to keep the vehicle.
Security deposits: An initial amount of your leasing company is required at the beginning of a lease to protect against non-payment. This is usually refunded at the end of your lease.
The termination fee or Disposition fee: The amount you must pay the leasing company at the end of your lease if you decide not to buy a car.
Wear costs: additional costs to be paid at the end of the lease any wear and use a leasing company to maintain a normal.