How Do You Understand A Car Lease?
When you lease a car, you put little or no money down and can drop off the car after a few years without the hassle of selling it. Convenient, yes’but potentially complicated. Think of holding a lease as making payments on the amount that the car depreciates while you have it. That depreciation is figured by subtracting the car’s projected value at the end of the lease (residual value) from the sticker price (Manufacturer’s Suggested Retail Price, or MSRP). For example, if a vehicle with a sticker price of $20,000 has a projected value of $12,000 in four years, the depreciation is the difference, or $8,000. You’ll be making payments on this $8,000. Know the parameters of a closed-ended lease. These leases give you the option of purchasing the car at the end of the lease term, but also allow you to walk away without buying. Generally, the purchase price is determined before the lease is signed. Closed-ended leases offer the benefit of choice. Understand that open-ended leases require yo
