Leasing
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Leasing is a financing option that lets you pay for the portion of a vehicle you expect to use over a specified term, plus a rent charge, taxes and fees. For example: You might want a $20,000 vehicle. And that vehicle might be worth about $9,000 at the end of your lease (residual value). If you purchase the vehicle using traditional retail financing, your monthly payments will be based on the entire $20,000 value of the vehicle plus a finance charge and you will own the vehicle at the end of your financing term. However, if you lease the same vehicle, your monthly payments will be based on the amount of the vehicle you expect to "use up" over the lease term plus a rent charge, taxes and fees. This value ($11,000 in our example) is the difference between the original cost ($20,000) and the estimated value at lease end ($9,000). With leasing you can get low monthly payments, a new vehicle more often, more vehicle for the money and no resale or trade-in hassles. Keep in mind, with leasing you do not own the vehicle, you return it to your dealer at lease end unless you choose to exercise the purchase option as defined in your lease agreement. A low milage lease allows for 12,000 miles per year. It may be less expensive to increase the mileage limit at the beginning than it is to pay for extra miles at the end of the lease. Milage can be added up to a total of 100,000 for the term of the lease. You, the lessee, decide. If you purchase additional miles up front, you may be entitled to a refund of any unused additional miles at lease end. There are two types of leases - Open-Ended and Closed-Ended. Open-Ended Lease - In this type of lease, you take the "risk" that, at the end of the lease term, the vehicle will have a market value comparable to the amount specified in the lease contract, sometimes called an "estimated residual value." If the amount the car is resold for is equal to the estimated residual value, you owe nothing. If it isn't, you may owe all or a portion of the difference, often called an "end-of-the lease payment." Closed-Ended Lease - In a closed-end lease, you make a predetermined number of lease payments for a specified period of time and return the vehicle at the end of the term. Barring physical damage to the vehicle, excess wear and tear, or additional mileage beyond the mileage allocations in the lease, you have no contingent responsibility for the vehicle's value at the close of the lease. With a closed-end lease, any loss of value through depreciation of the vehicle is the responsibility of the leasing company. At Labadie we only sell Closed-Ended Leases! Get pre-approved for a lease today! Click here to fill out a secure credit application. |