Leasing a New Car?
Here are a few definitions of basic terminology.
CAPITALIZED COST OR GROSS CAPITALIZED COST: The negotiated price of your vehicle. It includes anything extra purchased with the vehicle. (Service contract, rust protection, insurance, etc.)crack slip delphi
NET TRADE-IN ALLOWANCE: This represents the difference between the loan balance on your car and the amount the dealer is paying for your vehicle. It is your trade-in equity. If the dealer is paying more than you owe on your trade in, you have positive equity. If you owe more than the dealership has agreed to pay, you have negative equity.crack slip delphi
CAPITALIZED COST REDUCTION: This figure represents your down payment, trade-in equity and any rebates, reducing the capitalized cost of your vehicle before a monthly payment is calculated.crack slip delphi
ADJUSTED CAPITALIZED COST: This is the estimated worth of your car at lease end. This figure affects your monthly payment. The higher the residual value of a car, the less you will pay each month to lease your car.crack slip delphi
DEPRECIATION: The value lost on your vehicle during the lease. This figure represents the difference between the adjusted capitalized cost and the residual value.crack slip delphi
RENT CHARGE: another way to tell you the total amount of interest you are paying. If your lease says “lease charge” it is the same thing.crack slip delphi
EARLY TERMINATION FEE: If you terminate the lease before its term, a penalty payment may be added to the amount you owe the bank.crack slip delphi
PURCHASE OPTION: The amount you’ll pay the car should you choose to buy it at the end of the lease.crack slip delphi