Many people are opting for leasing a car in place of buying one because it gives you the opportunity to have the latest tech and smaller down payments, and many other such options. But, before you decide to lease that car for yourself, make sure you know everything about car leases. It is not much of a complicated matter, but you will still need to be familiar with the terms in order to make the right decision at every stage. So, take a look at a few of the terms and facts that you need to know about leasing a car.
The Three Important Terms Related To Car Leases
Capitalized Cost: The capitalized cost is basically the value of the vehicle. You should negotiate this value just as if you were purchasing the car. Any discounts from the capitalized costs, like the special lease deals from automakers, are known as cap cost reductions.
Residual Value: The residual value of a car is its expected value after the end of the lease period. It is not negotiable.
Money Factor: The money factor signifies the rate of interest that you will have to bear. To convert the money factor to a more familiar annual percentage rate, you will have to multiply it by twenty-four thousand. You can do the calculation yourself, or depend on an online money factor converter to do the conversion for you.
The Sales Tax Factor For Leasing A Car
Depending on where you stay, leasing a car can save you a huge amount of money in the sales tax. In some state laws, you will only have to pay tax on the money that you put down and on the monthly payments. In other areas, you will have to pay sales tax on the entire cost of the car, which makes leasing a less viable proposition. When you purchase a car, you are generally liable for sales tax on the total purchase price, less the value of your trade-in for most states. You will need to check with a tax professional who knows your particular circumstances and the particular tax laws of the location.
The Down Payment Aspect Of Leasing A Car
When you lease, you will often have a smaller down payment than if you buy. In fact, some leases require nothing due at signing. Consider going on leasecosts canada to get a good quality car with the right terms and conditions.
Many specialists say that you discuss the lowest amount due at signing that you possibly can. If you pay a considerable amount up front and wreck the car on the way home, all of your money.