Automobile leasing is the concept that a driver (Lessee) will pay only for the amount a vehicle is expected to depreciate during the time it will be used (Lease Term). The Depreciation is the difference between the vehicle's current value (Capitalized Cost) and its projected value at lease-end (Residual Value). As a result the smaller the difference, the lower the lease payment.
Since lease payments are calculated primarily on the vehicle's depreciation, not its entire value, monthly payments are sub-stantially lower than conventional financing options. This feature offers consumers the ability to upgrade their vehicle selection while staying within their budget. For example- below we compare the difference between leasing a vehicle with a Capitalized Cost of $35,000 and a Residual Value of $17,500 verses conventional financing for the same vehicle over a 3 year period. For the purposes of the comparison we used a lease money factor and annual interest rate which were competitive at the time we preformed this calculation and exclude any fees or taxes which will affect the monthly payment or total amount paid in both cases. We recommend that you contact the leasing representative appearing on this page for details on those additional charges before making a final decision.
Due to the inherent risk associated with leasing, financial institutions typically have more stringent credit guidelines for leasing than for conventional loans. As a result, consumers with less than stellar credit histories may find it more difficult to get ap-proved for a lease than an auto loan. If you're unsure about your eligibility please take advantage of quick and hassle-free online pre-approval process.