Archive for the ‘Lease Payments’ Category

Insider Secrets for Cheap Car Leasing

Tuesday, August 7th, 2012

Cheap car leasing is definitely an option worthy of pursuing. “What should I find out about car lease deals?” It’s likely you have this question running through your mind every so often. At no time in recent history have individuals and business owners had the opportunity to take advantage of these kinds of various specials.

Lease deals for the Ford Fiesta starts at around $149 per month for 24 months with around $2,400 due at signing. Lease prices always depend on the city and state because of different costs to the dealer and different taxes. You can find lease deals for the Toyota Corolla starting close to $149 per month for 36 months, with $2,400 as an initial deposit. While looking for auto lease specials take note of the listing price ranges, the contract conditions, and also the reputation of the dealer. You can get more knowledge about dealers, vehicles, and purchases from the paper and on the internet.

To get the best cheap car leasing discounts, you should think about investigating online initially for the various car models and features . Even though you set up an agreement on-line does not necessarily mean that you always need to finish the leasing deal online. The very best cars to pick out for personal leasing and the ones available for the best deals are typically the ones that hold their worth best, or have the least depreciation, ie Toyotas and Hondas. So, to start off comparing prices to get the best car lease deals begin looking everywhere.

An additional way to know the optimal season to lease a vehicle, it’s best to watch the newspaper and TV ads to see when the model year close-outs are happening. This is when dealerships are working hardest to clear out old inventory and make room for the next model year. This is the way you’ll find the best car lease deals of the year. These promotions will typically happen for most car brands in late summer or early fall.

Vehicles that have minimal depreciation value in in reality have the very best vehicle lease offers. Vehicles which are larger sized, more lavish and have premium brand names are always more costly to lease. The bulk of leased vehicles are covered by warranty through the lease term, so most potential repairs costs will be minimal, which is great bonus. An added question that bargain hunters appears to be asking is if hybrid cars will be worth the additional cost upfront? For today as with all other vehicle lease their costs may differ and a few are definitely more as well as some will help you save money.

When evaluating vehicle lease deals take note of the list prices, the agreement conditions, as well as the reputability of the car dealer. There are numerous disguised dealership costs that you could often decrease or be free from having to pay completely. Remember that the simplest way to approach cheap car leasing is picking a lower cost car with the least depreciation and negotiating the best terms up front. One of the best things about leasing is the flexibility you can create in the terms of the lease deal. Be sure that they’re customized for your needs.

Car Lease Calculator

Tuesday, July 17th, 2012

Here’s a quick video tutorial on how to use the car lease calculator to evaluate the best lease deals:

It’s an easy tool to calculate your lease payment on the spot.  Click here to use the car lease calculator.

Am I Paying Interest on Leasing a Car?

Tuesday, April 24th, 2012

Some car leasers often wonder whether there is some sort of interest being paid on their monthly lease payments. Technically speaking, there is no “interest” on  leasing a car, but that’s only because dealers use a different term for interest or interest rates when it comes to car leasing. You see, for financing the purchase of a vehicle, interest rates are used, but when leasing a vehicle, money factors are used. The money factor is generally a small decimal number that is similar to an interest rate. The money factor can even be converted into an interest rate by simply multiplying it by 2400.

The money factor is used to come up with the finance fee, which makes up a small portion of the monthly lease payment. The finance fee is a required fee that is paid to borrow the finance company’s money in order to lease a car. Similarly, when you purchase a vehicle, an interest rate is used to come up with the amount you are obligated to pay in interest charges.

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What is Rent Charge on a Car Lease?

Tuesday, April 17th, 2012

The rent charge on a car lease refers to the total sum of finance charges that the lessee will pay over the entire term of the car lease. The rent charge is also known as the “lease charge” and it is one of the three components of what is paid for over the term of a car lease. To come up with the rent charge, the dealer uses the money factor. The money factor is a small decimal number that is similar to an interest rate on loans or vehicles that are financed. The money factor is based on the lessee’s credit worthiness, which essentially entails that people with higher credit scores will be offered lower money factors and thus lower monthly payments.

The rent charge is essentially a fee that is paid for borrowing the finance company’s money. Think of it as paying interest on a loan. The rent charge makes up a small portion of the total monthly car lease payment. The depreciation charge is what makes up the majority of the total monthly lease payment.

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What is the Difference Between Gross Capitalized Cost and MSRP?

Monday, April 16th, 2012

The difference between the gross capitalized cost and the MSRP has to do with two things. The first is pricing and the second is the actual price that is used to come up with the monthly lease payment. The MSRP, or the “sticker price” is the price that you’ll find printed on a car’s window at the car dealership. The MSRP is not the final price that the dealership uses in order to calculate your monthly car lease payment. The gross capitalized cost is the final negotiated price of a vehicle which is used to calculate the monthly lease payment. The gross capitalized cost is also known as the “selling price.” If the gross capitalized cost is significantly lower than the MSRP, the lease deal can be considered a “good” deal.

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Can a Lease Price be Negotiated Lower than MSRP?

Sunday, April 15th, 2012

A lease price is quite often negotiated lower than the MSRP. The lease price, which in technical leasing terms is known as the “selling price” or “gross capitalized cost,” is used to come up with the monthly car lease payment. The lower the selling price of a car, the lower the monthly car lease payment. Therefore, it is in the best interest of people interested in leasing a car to negotiate the selling price of the car to bring it as low as possible.

If the dealer offers you a lease deal that uses the MSRP as the selling price, you have not necessarily received a good deal. Most good lease deals use selling prices that are significantly lower than the MSRP. Prior to visiting a dealership, you should look up invoice prices for the cars that you are interested in leasing. Invoice prices are the prices that dealers pay the manufacturers in order to buy their cars. The selling price of a car lease deal should be as close to the invoice price as possible in order for it to be considered a good lease deal. In some cases, the selling price is even lower than the invoice price.

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What to Know When Leasing a Car

Thursday, March 15th, 2012

When shopping for a new car to lease, many people tend to visit car dealerships without much prior preparation or knowledge about car leasing and what it entails. Most people will probably have a fair idea of the make and model vehicle they are interested in leasing, but knowing this piece of information by itself is far from sufficient when it comes to what you should know when leasing a car. In this article, we will provide specific information regarding what to know when leasing a car so that you are well-prepared and well-informed.

1. You should know that you are absolutely sure that you want to lease a car. Keep in mind that once you lease a car, you have signed a legally binding contract that obligates you to make a payment every month until the end of your lease. Of course, there are ways to end your car lease early, but they aren’t always available or easy to do.

2. You should know what car you want. It is important to know what car you are looking for so that you don’t waste your own time or the dealer’s time. Do your research before going to the dealership and come up with the ideal car that you plan on leasing. This significantly reduces the time that you will spend at the dealership.

3. You should know your credit score and be familiar with your credit history. Your credit score will essentially determine how good of a lease deal you can get. People with tier 1 credit can get the best deals available because they have exceptionally high credit scores. If your credit hasn’t been established, which is common for younger people whose access to credit is more limited, you may not qualify to lease a car and you should seek a co-signer to help you get approved.

4. You should know the invoice price of the car you plan on leasing. The invoice price of a car is the price the dealer pays the manufacturer to buy the car and place it in the showroom or lot. It is important to know the invoice price because it tells you just how much you can reduce the selling price to bring it as close as possible to the invoice price in order to get the lowest monthly payment. The selling price is the negotiated price of the car that the dealer uses to calculate your monthly lease payment. The lower the selling price, the lower your monthly lease payment.

5. You should know how to calculate your car lease payment. If you understand how a car lease payment is calculated, you stand in a better position to negotiate because you have familiarized yourself with with what can or cannot be changed or adjusted with respect to a lease deal provided by the dealer.

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What is the Residual Value of My Car?

Tuesday, March 13th, 2012

The residual value of your car is determined at the time of the signing of your lease agreement. The dealer uses this residual value to calculate your monthly car lease payment. Therefore, the residual value of a car that you are interested in leasing or that you have already leased becomes identifiable as soon as the dealer has prepared a lease deal with details including the required down payment and the required monthly payment.

If you want to know the exact residual value of your car, several methods are available in order to find out. Here are three different ways to find out the exact residual value of your car:

  1. Check your lease contract/lease agreement which definitely documents the residual value.
  2. Ask the dealer during the time when you are signing your new auto lease agreement.
  3. Call the finance company to whom you are responsible for making your monthly payments every month and ask them to provide you with the residual value of the car you have leased.

Although they may not precisely represent actual residual values, information about residual values can also be found online on websites like Cars.com. Keep in mind that precise residual values may vary from one finance company to another.

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How are Taxes on Car Lease Payments Calculated?

Saturday, March 10th, 2012

Taxes on monthly car lease payments are calculated on the base monthly payment or the base rent. The base monthly payment includes the depreciation charge and the finance charge. Together, the depreciation charge and the finance charge make up the base monthly payment which is paid to the lessor or leasing company every month until the maturity date of the lease (end of the lease term). Put more simply, the base monthly payment is the portion of the monthly car lease payment that includes all charges except the sales tax.

The sales tax that is added on to your base monthly payment can vary by city, county, or state. The total monthly car lease payment is calculated by multiplying the base monthly payment by the sales tax rate for the city or county in which the car is driven and then adding this product to the base monthly payment. For example, if the base monthly payment on a car is $200.00 and the sales tax rate is 8.75%, the total monthly car lease payment would be $217.50.

$200.00  x  .0875 = $17.50

$17.50 + $200.00 = $217.50

The total monthly payment would be $217.50.

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Car Lease Rent Charge

Saturday, March 10th, 2012

The car lease rent charge is one of the several components of a monthly car lease payment. There are three different components that make up a monthly auto lease payment which include the rent charge, the depreciation charge, and sales tax. The rent charge, also known as the finance fee or leasing fee, is the portion of the monthly lease payment that is paid as a “fee” for borrowing a leased car. It is similar to paying interest on a loan.

The rent charge is calculated using a small decimal number that is similar to an interest rate on loans. This small decimal number is known as the money factor and can even be converted into an interest rate by multiplying it by 2400. It works in a way that is similar to interest rates in the sense that higher money factors lead to higher rent charges, while lower money factors lead to lower rent charges.

It is important to realize that money factors often remain unlisted on car lease agreements which means  car lessees often do not know whether the money factor that was used to determine their rent charge was fair or reasonable. Therefore, it is important to always ask the dealer what money factor was used to come up with the monthly lease payment. This money factor should then be converted into an interest rate. Money factors for car leases should be comparable to interest rates available for financed cars.

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