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Automobile Leasing

OpportunitiesLeasing Questions

Answered

Auto Lease Contract• Lease Company (Lessor)• Customer (Lessee)

Legal Agreement

• Vin NumberSpecific Vehicle

Specific Amount of

Time

Specified Conditions

Specified Costs

Leasing

Customer Drives an Automobile

Making Relatively Low Payments

Auto Owned by Leasing Company (or Bank)

Leased for a Specific Time Period

Returned at the End of the Lease

Option to Purchase Generally Offered

Depreciation

Steady Reductio

n in a Vehicle’s

Value

Based on Vehicle

Age

Based on Miles

Driven

Greatest in the

First Year

Lessees Pay for

Depreciation

Not the Entire

Value of a Vehicle

Car Lease Refinance

End One Lease and Begin Another

Same Vehicle

Cannot Change Finance Terms of a

Lease

Wear-and-Tear

Lessee Responsible for Normal Wear-and-

Tear

Items

• Tires• Wiper

Blades• Light Bulbs• Brakes

Residual Value Predicted Lease-End Value of Vehicles Important to the Calculation of Monthly

Payment

Lease Payment Basic

Negotiated Price-Residual Value

Lease Penalty

Excessive Mileage

Penalty on a Per-Mile

Basis

Excessive Wear-and-

Tear

Damages Beyond

“Normal”

Terminating a Lease

Before Normal

End Date