Price:
This is also called the Capitalized Cost.
This is the final price you arrive at when buying a car. This price is
generally
the same whether you decide to lease or buy the car - it is the starting
point from which all other negotiations are based.
Security Deposit:
This is a refundable payment generally to insure the
leasing company against above-average wear-and-tear that may result.
Term of Lease:
Length of term of lease in months.
Lease APR:
It is the abbreviation for annual percentage rate. This is simply
the finance rate of the lease (analogous to APR).
Residual Value of Car at Lease End:
This number is generally 40-75% of
the final negotiated price of the vehicle. This number is commonly artificially
inflated by manufacturers' leases to reduce the depreciation of the car
over the term of the lease. This, in turn, lowers your monthly lease payments.
The residual value depends on the length of the lease (lower if the term
is longer, since the car depreciates) and what value the car is expected
to maintain over time (which can vary according to leasing company). |
