Everyone Should Know This About Leasing
There is another big disadvantage: in the event of your car getting damaged or stolen, you insurance and the gap cost will not cover the loss. Then you should take a look at instant same day loans or mortgage deals
Most leasing companies allow you a limit of 45,000 free miles over the length of a 3-year lease. This may seem like a good deal at first sight, but when you consider it only comes to 15,000 miles over a 12 month period it's not difficult to foresee why it might be difficult to stay within this limit.
Be realistic about your mileage needs, especially if you have to regularly commute over long-distances, before you sign the contract. Consider padding he miles that you expect to use since it is less expensive to contract for the extra before you sign than it is to pay the extra charges at end of your lease.
Let us suppose you're leasing a car with a capitalized cost of $25,000 and a residual value of $15,000. You average balance over the lease term, irrespective of how long it is, is $20,000 - the sum of the two divided by two.
Using this sum works because the money factor is the annual interest rate devided by 24, rather than 12. Continuing with our example and assuming an interest rate of 6% APR: $30,000 X (6 per cent / 24) = $75 (Capitalized cost + residual value) X (interest rate / 24) = Monthly finance charge.
Suppose you decide to lease a vehicle with a retail price of $23,500. The leasing company estimates that after a three year lease, the vehicle will be worth 35% of its original retail value, or $8,225. The difference, $15,275, divided by the number of months in the lease, 36 months, gives us the depreciation fee ($424)
Mileage allowance The maximum number of miles a leased vehicle can be driven a year without incurring an excess mileage penalty. A typical mileage allowance is 12,000 to 15,000 miles a year, although this is negotiable with your leasing company.
So how do you spot a good deal? First, you need to find out if there are any down payments on the lease. A down payment refers to the lump sum amount that you pay upfront, either in cash, non-cash credit or trading allowance, to reduce your monthly payment. - 2368
Most leasing companies allow you a limit of 45,000 free miles over the length of a 3-year lease. This may seem like a good deal at first sight, but when you consider it only comes to 15,000 miles over a 12 month period it's not difficult to foresee why it might be difficult to stay within this limit.
Be realistic about your mileage needs, especially if you have to regularly commute over long-distances, before you sign the contract. Consider padding he miles that you expect to use since it is less expensive to contract for the extra before you sign than it is to pay the extra charges at end of your lease.
Let us suppose you're leasing a car with a capitalized cost of $25,000 and a residual value of $15,000. You average balance over the lease term, irrespective of how long it is, is $20,000 - the sum of the two divided by two.
Using this sum works because the money factor is the annual interest rate devided by 24, rather than 12. Continuing with our example and assuming an interest rate of 6% APR: $30,000 X (6 per cent / 24) = $75 (Capitalized cost + residual value) X (interest rate / 24) = Monthly finance charge.
Suppose you decide to lease a vehicle with a retail price of $23,500. The leasing company estimates that after a three year lease, the vehicle will be worth 35% of its original retail value, or $8,225. The difference, $15,275, divided by the number of months in the lease, 36 months, gives us the depreciation fee ($424)
Mileage allowance The maximum number of miles a leased vehicle can be driven a year without incurring an excess mileage penalty. A typical mileage allowance is 12,000 to 15,000 miles a year, although this is negotiable with your leasing company.
So how do you spot a good deal? First, you need to find out if there are any down payments on the lease. A down payment refers to the lump sum amount that you pay upfront, either in cash, non-cash credit or trading allowance, to reduce your monthly payment. - 2368
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posted by Frank Potter at 3:36 AM
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