Van leasing jargon can be confusing, exceptionally when compared to the straightforward terms used when financing a vehicle. The capitalized expenditure, capitalized payment diminution, residual value and beans element are big-league figures used to calculate a let.
Capitalized Cost
The capitalized cost is the negotiated sale payment of a rent vehicle. On a lease, your monthly payment is calculated based on the difference between capitalized cost and residual value.
Money Factor
Interest rates on leases are normally expressed as money factors. You can convert a money factor to APR by multiplying by 2,400.Capitalized cost reduction is the unmarried easiest way to lower a lease payment.
Residual Value
The residual value is the projected value of a vehicle at lease end, normally expressed as a percentage. The residual value is calculated by multiplying the MSRP by the residual percentage. Be definite to negotiate a reward lower than the manufacturer's suggested retail fee.
Capitalized Cost Reduction
Capitalized fee discount is bread down that is besides lowers the cash selling valuation of a vehicle.For instance, a money factor of .00248 is converted to an APR of 5.952 percent.
Expert Insight
While negotiating, a dealership may confuse you by using leasing terminology. Be sure to ask for full disclosure of all lease terms before signing a buyer's order.
