Lease Terms Explained
AUTO LEASE TERMS IN PLAIN ENGLISH FROM YOUR OMAHA CHEVY DEALER
When you’re deciding if you want to lease your next vehicle, understanding the lease is a vital part of the process. Huber Chevrolet Co., Inc. will be happy to walk you through the lease and make sure you understand all of the terms. If you’re still researching Omaha lease deals, here’s a quick guide on some of the most common auto lease terminology.
Acquisition Fee – the administrative charge to arrange the lease. Sometimes this is called an administrative or bank fee. Not all leases have an acquisition fee.
Adjusted Capitalized Cost – or ‘net capitalized cost’ the cap cost minus the cap reduction.
Capitalized Cost – or ‘cap cost’, one of the most important parts of the lease. It’s the negotiated price of the car plus any additional fees you might want to include in the monthly lease payment.
Capitalized Cost Reduction – or ‘cap reduction’, this is anything that lowers the cap cost. This is where you consider a down payment, any trade-in allowances, or apply any %FRANCHIESES% rebates.
Depreciation – The loss of value of the vehicle over the term of the lease.
Destination Fees – The charge to have your vehicle delivered to Huber Chevrolet Co., Inc..
Disposition Charge – If you don’t lease another vehicle from Huber Chevrolet Co., Inc. when your current lease ends, there may be a small fee associated.
Documentation Fees – administrative fees, this goes along with Tag, Title, Registration and License fees.
Down Payment – some leases require a down payment as part of the terms. This money reduces the overall cost of your lease.
Gap Insurance – insurance that protects your lease vehicle if it’s stolen or totaled. Some leases come with gap insurance, some don’t.
Lessee – this is you, the customer. The person who is leasing the vehicle.
Lessor – the dealership, bank or independent leasing company. They legally own the vehicle.
Mileage Fee – the fee charge at the end of your lease for excessive miles driven during the lease. Your lease will explain this in detail, usually a per-mile charge.
Purchase Option Fees – this is what you’ll pay if you decide to purchase the car at the end of the lease.
Residual Value – this is used to determine the cost of your lease, it’s what your vehicle is expected to be worth at the end of the lease.
Sales Tax – the is charged if your lease involves a down payment, and can sometimes be written off on your taxes.
Security Deposit – like renting an apartment, the security deposit ensures that you’ll pay any damages you cause to the vehicle when you turn it in. Not all leases have a security deposit.
Term – the amount of time you’ll be leasing your vehicle. The most common lease terms are 24, 36, 48 and 60 months. Generally speaking, the longer your term, the lower your monthly payments, but you’ll pay more money in interest.
Tire Fee – usually a mandatory fee.