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FutureStarrhow much are monthly car lease payments
Before you close the final credit card offer, consider these tips on negotiating lease terms.
The agreement that you’ll sign outlines the length of the lease, your monthly payments, the maximum number of miles you can drive per year, and other terms. When the lease ends, you’ll typically have the option of purchasing the vehicle or simply returning it. If you return the car, the dealer will expect it to be in good shape. If it has any damage beyond the expected wear and tear, you’ll have to pay more money to cover it. The residual is a value decided by the bank or leasing company. It’s just an prediction, and the vehicle’s actual value at the end of your lease will probably be either higher or lower than the residual. Banks estimate residual based on the vehicle you are leasing, the term length, and mileage. For example, a vehicle that’s driven 15,000 miles per year for 3 years (total 45,000 miles), will be worth less than the same vehicle if it’s driven only 10,000 miles per year (total 30,000 miles).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.
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. 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. (Source: www.calculator.net)