Lease Cost on 40000 Car

Lease Cost on 40000 Car

Lease Cost on 40000 Car


Don't buy a new car, lease one instead. You save a lot of money in the long run. But, as it turns out, there are some hidden costs you should consider, before blindly following everyone's cost-saving advice. You might just be able to lease a cheaper, more reliable car for less.


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. (Source: www.calculator.net)


Are you the type of person who wants a new car every three or four years? If so, leasing can be a cost-effective alternative to buying. Today, about 26% of new cars are leased rather than purchased. (Source: www.investopedia.com)



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