The Facts And Details Of Car Leasing

By Author: Daniel Owen
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Car Leasing is a motor vehicle that is leased for an indefinite or a fixed period of time. Dealers commonly offer this as an alternative to purchasing the vehicle. Once the lease expires the lease must buy the vehicle or return it to the dealer. Leasing can offer advantages to not only the seller but the buyer as well.

Advantages For The Leasor

For the Leasor the vehicle on lease will generate an income but still belong to the dealer. Once the lease expires they then have the opportunity to lease the vehicle out again or have the option to sell it. Leasing can generate the dealer repeat customers quickly as the customer will typically use a leased vehicle for a shorter period of time than one that they would purchase.

Advantages For The Buyer

For the buyer payments on a car loan would usually be a lot higher than payments on a car leasing and qualification to obtain the lease is usually much easier to obtain than a loan. A great benefit to Car Leasing is that the buyer has the opportunity to drive a new vehicle every few years, also giving the buyer no responsibility of selling the ...
... old vehicles, they can simply return the car and select a new model. Only the vehicle owner has to worry about the future value of the car not the buyer.

Lease Agreement

Upon early termination of a Lease the Lease agreement in place typically stipulate a fee for early termination. The agreement in place usually puts a limit on the number of miles a lessee can drive; a typical figure per year is between 12,000 to 15,000 miles. If the miles are exceeded fees may be applied to the lessee. The dealer will usually allow negotiations to take place with the buyer to increase the yearly millage they are allowed to drive, this will increase the lease price to the buyer. On top of millage restriction the lease agreement can also contain an agreement of how much wear on the vehicle is aloud, if the wear is exceeded the Lessee may also face a fee.

Lease payments are calculated very similarly to that of a loan payment, however instead of APR the company use 'Money Factor'.

Money Factor

Money Factor can also be known as Lease Factor, Lease Rate or Factor. Money Factor is usually given as a decimal and to find the APR equivalent the Money Factor is multiplied by 2400. Therefore an example is .0030 would be the equivalent to an APR of 7.2% and an interest rate of 0.6%.

The end price of a lease is usually agreed when the lease is being taken out, at the end of the term the vehicle is just to be returned to the owner or purchased.

Leases do not have to be taken out just for Car's they can also be for Vans, Minibuses or whatever type of vehicle you are in need of.

About Author:

Daniel Owen writes about Car Leasing. To know more about Car Leasing, visit http://www.businessmagnet.co.uk