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Difference between revisions of "Leasing a Car"
From Clicklaw Wikibooks
→Types of vehicle leases
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First, a '''straight lease'''. With this, you return the vehicle when the lease ends and owe nothing more. This is rarely used. | First, a '''straight lease'''. With this, you return the vehicle when the lease ends and owe nothing more. This is rarely used. | ||
Second, a '''lease with an option to purchase'''. This comes in two forms — open and closed. In a closed lease with an option to purchase, you pay an agreed-on amount if you decide to buy the vehicle at the end of the lease. | Second, a '''lease with an option to purchase'''. This comes in two forms — open and closed. In a '''closed lease''' with an option to purchase, you pay an agreed-on amount if you decide to buy the vehicle at the end of the lease. | ||
In an '''open lease''' with an option to purchase, you may have to pay an extra amount at the end of the lease. How much more you have to pay is explained in the lease agreement. At the beginning of the lease, a dealer estimates what a vehicle will be worth at the end of the lease (the '''residual value''') and then calculates the monthly payments based on that estimate. If the vehicle is worth less at the end of the lease, you have to pay more to make up the difference. You may also have to pay extra if you drove more than the lease allowed or if the vehicle has more than normal wear. | In an '''open lease''' with an option to purchase, you may have to pay an extra amount at the end of the lease. How much more you have to pay is explained in the lease agreement. At the beginning of the lease, a dealer estimates what a vehicle will be worth at the end of the lease (the '''residual value''') and then calculates the monthly payments based on that estimate. If the vehicle is worth less at the end of the lease, you have to pay more to make up the difference. You may also have to pay extra if you drove more than the lease allowed or if the vehicle has more than normal wear. | ||
