Auto-Leasing Articles

Using Lease Calculators

(category: Auto-Leasing, Word count: 242)
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Want to calculate your monthly lease payment? Consider using a lease

calculator

If you are considering a car lease, then you might want to know some key

figures involved in the deal: the monthly lease payments, the overall cost

of the lease and how much savings can be made compared to purchasing the

vehicle.

A lease calculator relieves you from the stress of having to know the

complex underlying lease formulae used in calculations. You simply plug a

number of figures into the calculator and hey presto! You get a detailed

rundown of detailed payments, taxes and total lease costs.

Figures you need to get from your dealer about a specific lease you're

interested in include: capitalized cost, estimated residual value at the

end of the lease, the number of months in your lease and the money factor.

Make assumptions and change some of the figures to see how it affects your

lease payments. For instance, residual value is an "estimated" value of what

the vehicle will be worth at the end of the lease. You can input different

estimates to cover different scenarios and assumptions.

As a final note of caution, bear in mind that lease calculators only do

calculations and check the accuracy of abstract mathematical formulae. They

do not tell you whether a lease is good or bad.

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Dealer Leasing Tricks

(category: Auto-Leasing, Word count: 465)
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Too often when it comes to auto-leasing, people get so dazzled by the

myriad terms and the jargon thrown their way that they end-up paying

through the nose, relying on a dealer's "help" than their own informed

decision.

Here is a look at some of the tricks dealers use to pad their profits and

leave the customers shelling hundreds of dollars more than the deal should

be worth.

Trick 1: Leasing always a better deal than buying

Dealers use the lure of lower-monthly payments to entice customers to sign

for long-term loans, with terms stretching for five years or more, making

the payments even lower. There are two catches with such lengthy contracts:

higher mileage, exceeding the prescribed limit, and hefty repair costs.

With

leases charging on average 10 to 20 cents a mile for any extra mile over

the agreed amount in the contract, and warranties only covering three

years, you leave yourself wide open for hefty charges for excessive

mileage and wear and tear.

Trick 2: Cheap 2-3% APR rate on your lease

The dealer is not quoting the interest rate you would be paying on your

lease; he's rather giving you the lease money factor. Whilst similar to an

interest rate and important in determining your monthly payment, a more

accurate rate is calculated by multiplying the money factor by 24. For

example a "cheap" 3% money factor is 24 X 0.003 = 7.2%. This gives you a

better sense of what your annual interest rate on your lease contract is.

Trick 3: Stress-free early lease termination

Dealers know consumer driving needs change and they would like to have the

option of getting out of a lease commitment sometime down the road, before

their lease ends. Truth of the matter is, when you sign for a lease, you

are effectively saddled with monthly payments for the remainder of the

lease term and there is little-choice of getting out early. Lease contracts

carry hefty financial penalties for either defaulting on monthly payments

or terminating the lease earlier than the scheduled term.

To avoid being on the receiving end of such tried-and-true tricks, educate

yourself about leasing. Get down to the nitty-gritty and understand what

the leasing terms used by dealers mean. Crunch the numbers along with him

and understand how they arrived at the monthly payment figure. Don't sign

anything until you've understood all the terms and your numbers much those

of the dealer. Do not let the dealer pressure you into signing; you are the

one to determine whether the agreement is right for you.

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Independent Car Lease Companies

(category: Auto-Leasing, Word count: 215)
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To lease, you have two possible choices: either lease through a dealer's

finance source or through an independent lease company.

A conventional dealer has a captive finance source, which can be the car

manufacturer's financial company, such as BMW Financial Services, Honda

Motor Credit or General Motors Acceptance Corporation (GMAC), or a major

national bank such as Chase Manhattan.

Independent lease companies are no financial obligation to any single

one manufacturer financing source, but work with dealers anywhere in the

country.

So which one is better?

Conventional dealers provide better lease-deals on limited-time promotions.

Factory-subsidized cars that have subvented money factors and residuals are

very attractive lease deals and can be very hard to beat anywhere else.

Independent lease companies can offer you unbiased and professional advice

on vehicle selection regardless of make and model. This is because they are

not tied to a single manufacturer or financing source, unlike conventional

dealers who have to sell specific models. They can also be more flexible

regarding negotiating lease terms like residual value and mileage.

Ultimately, if you prefer a more personal and customer-oriented

relationship with your leasing agent, then you will do well with an

independent leasing company.

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Single Payment Lease

(category: Auto-Leasing, Word count: 218)
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A prepaid lease is a new type of lease which has made its foray into the

market in recent times. In this lease, consumers forego the cycle of lease

payments if they make a large payment at the beginning of the lease.

There are two amounts in a conventional lease that incur charges and

determine your monthly lease payments. First, there is a depreciation

charge which accounts for the value the car loses during the lease term.

Second is a residual amount which is the projected value of the vehicle at

the end of the lease. The sum of these two charges gives the monthly

payments on your lease.The idea behind a pre-paid lease is to eliminate the

finance charges for depreciation and only account for residual value

charges in a single, pre-paid payment at the beginning of the lease.

Single-payment leases are devised with spendthrifts in mind: no cycle of

monthly payments, a new car every two to three years and no interest in

purchasing the vehicle at the end of the lease. You should only consider

this type of lease if you are concerned about not being able to make monthly

payments and have a lot of cash upfront.

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Fees Involved In Leasing

(category: Auto-Leasing, Word count: 220)
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Mention auto-leasing and most people will automatically assume a low-

monthly payment. There is actually more than what meets the eye, and a

number of fees are involved at various stages of the lease process.

At the beginning of the lease, you have to pay a refundable security

deposit, typically equivalent to one monthly payment, to safeguard against

non-payment and any incidental damage done to the car at the end of the

lease. You are also required to pay an administrative charge, called

acquisition fee. Other fees include licenses, registration, title and any

state or local taxes.

During your lease, and you expected to honour your monthly payment

obligations. Any failure to do so will result in late-payment charges.

You have to pay any traffic tickets, emission and safety inspections and

ongoing maintenance costs. Ending your lease early will result in

substantial early termination charges.

At the end of the lease, expect to pay any excess mileage costs, charged

at 10 to 20 p a mile. Any incidental damage done to the car, and deemed to

be above normal, will result in excess tear-and-wear charges. Finally, if

you choose not to purchase the vehicle, then you have to pay a disposition

fee.

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Luxury Cars And Resale Values

(category: Auto-Leasing, Word count: 202)
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When it comes to ultra-luxury, high-end vehicle leasing, there is no doubt

that the best deals are those cars that hold their value. With this in

mind, we single out a few truths about residual values that consistently

apply to high-end leasing.

The most determining factor when it comes to resale values is public

perception of the brand, not its reliability ratings in quality surveys.

Take the Jaguar for example: it is consistently rated as a quality car, but

because of questionable reliability perception among the public, it takes a

sharp dip in value at the end of its lease-term

Higher-tech options and other cutting-edge features do not necessarily mean

the car will fare better. By the time your car is two years old, better

and cheaper systems will render the laser-guided cruise control, navigation

systems and built-in cell phone obsolete. Look for functional features,

such as automatic transmissions, power windows and wheel-drive to enhance

the vehicle's value in the used-car market.

Used-car buyers view less favorably luxury vehicles that come with big

incentives. These are perceived as questionable in quality and

reliability.

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Lease Trading

(category: Auto-Leasing, Word count: 214)
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Ever wanted to terminate your lease early, comfortable with the thought you

weren't going to be hit with hefty fees? You can if you transfer your lease

to someone else.

Trading a lease is the best option for people who want to terminate a lease

early and don't want to pay the large termination imposed by most lease

agents. It can also be an alternative to get out of a lease for far less

than you would otherwise pay your original lease company for extra mileage

and wear-and-tear charges that can run into the thousands of dollars.

For a small fee, you can advertise your car lease for assumption to a large

number of potential buyers on the look-out for leases on the Internet. Such

services include LeaseTrader.com, the originator of online lease-trading

and the biggest online marketplace where most lease transfers take place,

and smaller marketplaces such as BreakAlead.com and TradeAlease.com

Before swapping your lease, make sure your leasing company approves lease

transfer transactions. Caution must be exercised in choosing a lease

swapping service: make sure they facilitate the whole lease transfer

process, offer online or telephone customer-service help and registered

buyers undergo stringent credit checks.

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How To Get Out Of A Lease Before Your Contract Expires 257

(category: Auto-Leasing, Word count: 299)
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How to get out of a lease before your contract expires

When your lease is up, you can simply turn in the keys and lease another

car or buy a new one. But how about getting out before the lease ends?

Maybe you can't afford the sky-high payments on that silky Jaguar JX V6

model anymore or you've just had a baby and you need a larger and more

spacious vehicle?

Unfortunately getting out of a lease is not as easy as getting in! A

leasing contract is difficult and expensive to terminate early. Simply

turning in the keys and walking away from a lease can result in stiff

penalties. You credit could be ruined and you could even get sued for

breach of contract.

It's not all doom and gloom though. Actually, there is a number of

options available to you.

You can sell the car yourself and pay off the bank. This can be cost

effective if the market value of the car is close to the buy-out number.

Do not hesitate to exercise this option even at a loss if it happens to be

lower than the termination fee.

Your best option, though, is to transfer your lease for someone who would

"assume it" and take it off your hands. There is a whole set of potential

buyers looking for short-term leases without all the hassle and extra

costs. Check with family and friends or use the services of lease-

assumption websites, like swapalease.com, to list your car. Make sure you

check the credit worthiness of the new lessee and provide the car in good

condition.

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The Residual Value Of Leasing

(category: Auto-Leasing, Word count: 488)
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If you are in the market to lease a vehicle, you will hear the term

"residual value" recur like a leitmotif. A residual value does not only

affect your monthly payments, but is equally used by leasing companies

to determine any penalties should you break your lease early and how

much to pay if you decided to buy the vehicle at the end of your lease.

Let us first start by looking at the meaning of residual value. The

term "residual value", refers to the value of something after it has

been used for some time. In leasing lingo, it refers to the

depreciation of the vehicle's value over the life of its lease.

So how does it exactly affect your monthly payments? When you lease a

car, you pay for the car's value that you use over the lease length.

Suppose you leased an $18,000 car for 2 years: the leasing company

needs to estimate the value of this car in two years time in order to know

how much of the car you will be using during your lease term. That's where

the "residual value" comes into the equation. If the residual value is

estimated to be $13,000 at the end of your lease, then your monthly

payments will be calculated on the $5,000 you will use over 24 months,

giving an average monthly payment of $208.3 (plus interest, tax and fees).

How about if the car is expected to lose half its value over the same

period? In this scenario, you will be using $9,000 over the same period,

leaving you with a higher monthly payment of $375 (plus interest, tax and

fees).

As you can see, residual values are a key factor in determining how much

money to pay on your lease and the higher the residual value, the lower

your monthly fees. This works in reverse if you build a bond with your car

and decide to purchase it at the end of your lease. If we stick with the

same example above, the lower monthly payments in the second scenario come

at the cost of paying substantially more to buy your car at the end of the

lease.

So, since the residual value is so important, how do I know which one is

best for me? Well, it all depends whether you want to purchase the car at

the end of your lease. If you don't want to make a large down payment and

you want low monthly payments, then a car that holds with a higher residual

value is a good deal. If you are thinking of purchasing the car at

lease-end, then you need to balance low-monthly payments with a moderate

residual value.

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Auto-Leasing Articles

Using Lease Calculators

Dealer Leasing Tricks

Independent Car Lease Companies

Single Payment Lease

Fees Involved In Leasing

Luxury Cars And Resale Values

Lease Trading

How To Get Out Of A Lease Before Your Contract Expires 257

The Residual Value Of Leasing

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