Vehicle Leasing Guide Frequently Asked Questions on Auto Leasing

Frequently Asked Questions

Introduction: In today's world of motor vehicles, with the average cost of a new vehicle continually raising is now more important than ever to fully understand the options of leasing vehicles.

In my opinion the list price / MSRP window sticker or the vehicle is now assessed that the lease reflects the best way to buy the vehicle. In my 30 years of leasing of cars, here are some of the most common questions I received from my potential customers.

1. Should I rent or buy?

When you lease a vehicle you will be able to have a lower monthly payment and will have a much lower outlay.

You will be able to afford to rent a car that would probably not be able to afford to buy?
You will have lower maintenance costs as most new cars come with a 3-year warranty that will cover major repairs?

You will be able to drive a new car every 3 years.
There will be no trade-in or resale problems at the end of the lease.
Your sales tax will be less of a lease the new car as it is calculated only on the monthly payment, when purchasing a new car you must pay 100% of the tax on the entire vehicle, including the day you buy if you will ever use 100% of the car.

When you lease a vehicle you want, keep the working capital, make use of an additional source of funding, making a small investment towards the purchase of a car that depreciates faster then you can pay for it. Remember one of the fundamental rules of economics is that if
appreciates in value, possess. But if it depreciates in value, leasing.

Carmakers around the world have realized that to maintain high prices new car prices used cars must keep up.
They can keep prices high used car if they can not control the used car market. So then over inflating the price of new car depreciation and then under it which then makes the buyout prohibitively expensive, that are forcing the car to them. That allows them to set the value of a used car? That in turn allows them to maintain high prices for new cars.

Just think, if the cars were priced based on market value and then amortized over the future real value (because the technology has allowed most of the cars to do better today then ever ... they were like in the last 50,000 miles is no longer the point of obsolescence), then most people would buy the car at the end of the lease and keep it for another 2 or 3 years and would kill the economic cycle 3 years? It 'has been stated today that the average car has more on computer technology, then made the first Apollo space capsule has had?

2. What are the advantages of leasing?

More cars, less money down, less tax payable. Economy still requires that if you really appreciate, but if it depreciates rent. Own your home and you rent the car.

3. Mileage?

The mileage is a factor. If you do 12 to 15,000 miles per year should fit easily in most leasing programs. But make sure you correctly estimated mileage and make sure the lease is written to meet your needs.

4. If I do not use my allotment mileage can I get a refund?

You will be responsible for excess miles at the end of the lease, but in most of the leases will not get any refund or credit if you make less.

5. Duration of the lease?

Most leases run 36, 39 or 48 months, but there are special locations where it can be to your advantage to go shorter or longer?

6. What is the cost in capital letters?

This is the cost of the lease. And 'the sum of the acquisition cost of the vehicle plus any added on topics such as fees, bank charges or special equipment.

7. What is the residual value and where it comes form?

It is assumed that both the expected future value of the vehicle. Future values ​​are projected by looking at used car sales market reports and see what a vehicle similar to that used is selling for today.

8. Factor of money?

This is the factor that is applied to the sum of capitalized costs and residual value to give you the monthly lease.

9. How is the lease?

The capitalized cost less the residual value divided by the duration of the lease allows the monthly amortization. The monthly depreciation added to the cost of monthly rent gives you the monthly payment.

10. How are taxes calculated?

Each state calculates taxes differently. A New York are the times of payment of the monthly rent times the short-term tax rate.

11. What is the Fee and Fee Bank or acquisition?

This is an amount the lender charges to administer the paper lease. Or it could be a reduction of capitalized costs cash disguised as
a tax base or tax capture.

12. Security deposit?

This is a refundable deposit that the bank charges to fix or minimize the risk on the lease.

13. Can I put down additional funds to reduce my monthly payment?

Yes, any cash you put down is deducted from the capitalized cost and reduces the amount to be funded and lowers the monthly payment. This tax money is low.

14. Who ensures the vehicle?

You, the lessee insure the vehicle. Insurance can be arranged by the leasing company and added to the lease.

15. Maintenance?

You, the renter, are responsible for all maintenance that is not under warranty and or maintenance plan included in the Manufacture. Complete or partial maintenance programs to add to the car lease from the leasing company.

16. License, title and inspection of the vehicle?

All fees are billed to the tenant as a one time charge.

17. Manufacturers' rebates and incentives?

All rebates and incentives are applied for the calculation of capitalized leases.

18. Can I purchase the vehicle at the end of the lease?

Some leases will give you the option to purchase the vehicle at the end of the lease, but in most cases because the vehicle's value was inflated up-front and was depreciated, the ability to buy is too high. In most cases it is cheaper to rent a new car then to buy the old. Again it's all in the marketing system of major car manufacturers today, so forcing the car used to them and can control the values ​​of used cars.

19. When I lease is the manufacturer's warranty still in effect?

The manufacturer's warranty is the same no matter who buys or rents a car. Remains with the vehicle.

20. Can I rent a used car?

Yes, in some cases the benefits of leasing a used vehicle. However, it is more likely to be on a late model car that was more expensive that has low mileage and has been properly residualized form of the original contract.

21. If I rent a used car comes with a warranty?

Only if it is still under the mileage and time of the original warranty. But you can buy an extended warranty companies provide a warranty to cover the main parts of the engine and transmission. This is always a good investment and highly recommended.

22. What is my responsibility, at the end of the lease?

It is the lessee is responsible for kilometers in excess, give body, glass damage, neglect or abuse, excessive wear and tear and any unusual tire wear.

23. What is the difference between a closed-end lease and an open-end lease / lease?

The main difference is that is responsible for the resale of the vehicle. With the closed-end lease, the lessee is responsible as mentioned above for the leased vehicle. With the open-end lease is responsible for the residual value. You can pay for the value and the vehicle is yours or you turn it on and are responsible for selling the residual value. If they sell more, then you are credited the proceeds, but if it sells for less than you are responsible for the deficiency. Open-end leases are the best on trucks that have a longer life or high line cars that can appreciate in value or in case you may need an unusual amount of miles driven and does not pay to purchase the option mileage in excess.

24. How come the announcement in the newspaper or on TV is always so much lower then what I can get?

Advertising creative is usually the case. To place an ad in the newspaper, on TV or radio is very expensive and if a car dealer do it would be better able to attract your attention. Most car dealers only sell if you know how to get into their showrooms. So you have to convince a thing with his eyes bulging. What they do is back up every conceivable cost out the amount you have to capitalize the lease and mileage offer, terms, and a vehicle that does not really work for anyone in any situation. When the actual sale is made is a totally different story, with many hidden costs. The unsuspecting consumer sees or hears only the monthly payment gets all excited and runs to the retailer where the ship becomes a different story.

25. Credit score?

It 's very important that consumers know their credit score before each start shopping for any vehicle or any major purchase for that matter. Most car dealers advertise their offerings based on you qualifying for the super-preferred rate, and if you do not then, of course, is a completely different story. A different story that usually plays out at the last minute when you are left with can do is take their agreement or be ready to walk to work tomorrow morning.

26. I end the lease early?

No, the leases on the basis of written today inflated than those that are new under amortized make it impossible to exit a contract without incurring significant costs.

27. What is excessive wear and tear?

This is usually defined by anything on the vehicle that must be repaired to allow the vehicle to be sold for what it is speculated value. If you are interested in a car dealer or leasing company when negotiating a lease you should get their written definition of excessive wear and tear.

28. I have to make necessary repairs before moving the vehicle?

Yes, when you know you have damage or excessive wear will always pay for you to get the repairs done yourself in advance rather than leaving the car dealer or financial institution.

29. Does make a difference I lease or should I just look for the lowest monthly cost?

As you can see from reading all the above that makes a lot of difference who you are leasing. Check references and do your homework and do not fall for the lowest price at first sight.

30. Professional car dealer or Leasing Company?

When you have a choice usually your due diligence before with a leasing professional. It 's important to remember that the seller or leasing company has no interest in the car make and model lease, but only in the lessee. The leasing company wants you to have a professional experience of leasing, you get the vehicle you want at a cost that you want because budget builds its business on creating a relationship with you. At most, not all of the dealers is a shame, but the only way to know how to sell it to play a game. Must be obtained in the showroom. The guy who sells you the car shakes my hand and could care less about you or never see again. It is likely that he is building its business around you and if you go to the dealership a few months after that guy probably does not work there anymore? So, in my opinion should form the leasing company leasing professionals, whenever possible .......