Add your company website/link
to this blog page for only $40 Purchase now!Continue
FutureStarrEvery 1000 Down on a Lease
A growing number of U.S. businesses have emerged from a hard time to be the stars of the economic recovery. In all, more than 50,000 e-commerce and other U.S. companies have received less than $50,000 in lease payments for their property in 2010, which is the drop in payments e-tailers and others have seen. The industries that have contributed to this trend are manufacturing, wholesaling, and retail.
A lease is a contract allowing a party to convey property to another party for a specified time, usually in return for a periodic payment. A car lease allows a person to drive a car for a fixed period of time as they make a down payment as well as monthly lease payments until the lease ends. It can help to think of a car lease as a long-term car rental; while car rentals generally last for as little as a day or even just a few hours, car leases average between two and four years. Many leases allow the purchase of the leased vehicles through a purchase option agreement at a specified price once the lease ends. It is important to note that choosing to add such an option at the beginning of a lease will add a small amount to the monthly lease payment. Most car leases can be found at dealerships or private car dealers.It is expected that leased vehicles are returned to lessors in reasonable condition at the end of the lease period. When returned, vehicles will go through thorough inspections (usually a contracted third-party) to ensure that there is nothing out of the ordinary given the mileage accrued. As should be stated more specifically in each individual lease contract, any pertinent damage or faults accrued during the use of leased vehicles that are attributed to the lessee (such as collisions of their doing) will most likely come out of their own pocket. On the other hand, wear and tear can be the financial responsibility of either party, depending on whether visual inspection shows that it was "normal" wear and tear or "excessive" wear and tear. The two are explained in detail below.
Lessees can potentially avoid excessive wear and tear charges by taking good care of their leased vehicles. This can include adding protection such as car door guards, or assuring that small children are properly attended to. In the days prior to the return of the vehicle to the lessor, it can work in the lessee's favor to ensure that the car has as much curb appeal as possible. Giving it a wash, buffing out any scratches, replacing small broken parts, and removing stains from upholstery can help. Wear and tear insurance is available for lessees who feel that they might need it to cover excessive wear and tear. Lessees with too much excessive wear and tear have the option to avoid penalties if they buy the vehicle at the end of the lease.First of all, leasing is similar to renting… at the end of the agreed term, you own nothing. At that point you will need to find another vehicle. If you really loved your leased vehicle, you have the option to buy it at the agreed residual value, which is the value of the car at the end of the lease.A fee may be charged to buy the vehicle. If you decide not to buy, you can turn it in and walk away, provided your car is in pristine condition. If you have any nicks or damages, you will pay extra for excess wear and tear. You may want to cover this topic with the dealer before signing on the dotted line. Your idea of excess wear and tear may be different than his. It’s also very important to maintain the engine as indicated in the manual. You are responsible for maintenance. In the fine print you can see that there is also another fee for excess mileage. This example states a 10,000 mile limit, but many leases have a 12,000 to 15,000 mile per year limit. The charge for going over the limit is anywhere from 10 to 25 cents per mile. Contracts which are ended early also come with an early termination fee which makes it more expensive for leasees to return vehicles before their term is up. Also, if you decide not to buy the car at the end of the lease, you will be charged a disposition fee. Oh, and don’t forget that there will also be acquisition fees, registration fees, doc fees and possibly a tire fee. (Source: www.mortgagecalculator.org)
Residual Value—Sometimes called lease-end value. In essence, the residual value of a car is the amount it can be bought for at the end of the lease. Financial institutions that issue lease contracts, not the dealers, set residual values on vehicles. It is an estimation of the worth of the car at the end of the lease period. The difference between the price of the car minus residual value will result in the depreciation of the car after a lease, which is amortized throughout the lease loan. Therefore, auto leases tend to be more affordable for slowly-depreciating vehicles because they hold their residual values well. (Source: www.calculator.net)