Each lessor's definition of "normal" is different, but they tend to follow a basic pattern. Normal-Normal wear and tear is not the financial responsibility of the lessee.On the other hand, wear and tear can be the financial responsibility of either party, depending on whether visual inspection shows that it was "normal" wear and tear or "excessive" wear and tear. As should be stated more specifically in each individual lease contract, any pertinent damage or faults accrued during the use of leased vehicles that are attributed to the lessee (such as collisions of their doing) will most likely come out of their own pocket. When returned, vehicles will go through thorough inspections (usually a contracted third-party) to ensure that there is nothing out of the ordinary given the mileage accrued. It is expected that leased vehicles are returned to lessors in reasonable condition at the end of the lease period. Lessees that go over their mileage limits have the option to avoid the penalties by buying the vehicle at the end of the lease.
Keep in mind that the average American drives around 18,000 miles a year. Although the monthly lease payments for high mileage leases tend to cost more than the standard leases, they may be helpful to those who are prone to racking up a ton of miles. There exist certain car leases called "high mileage leases," which give lessees several thousand additional miles to work with annually. In the U.S., the average cost is between 5 to 20 cents per mile over. If the lessee exceeds this limit, there will be a penalty charge per mile over the limit when the lease ends. In the U.S., standard auto leases generally allow annual mileage limits of 10,000 to 15,000, with most coming in at 12,000. Most leases will have a mileage cap, which is the maximum number of miles the car can be driven during the life of the lease. Therefore, auto leases tend to be more affordable for slowly-depreciating vehicles because they hold their residual values well. The difference between the price of the car minus residual value will result in the depreciation of the car after a lease, which is amortized throughout the lease loan. It is an estimation of the worth of the car at the end of the lease period. Financial institutions that issue lease contracts, not the dealers, set residual values on vehicles. In essence, the residual value of a car is the amount it can be bought for at the end of the lease. Residual Value-Sometimes called lease-end value.Lease Term-This is the length of the lease.To get the money factor, divide the APR on the lease by 24 or 2400, depending on whether it is expressed as a decimal or percent. They generally work very similarly: the poorer the credit history of the lessee, the higher their money factor, and the pricier the lease. Lessors use the money factor as a way to determine lease rates that correspond to each lessee's credit history.
Money Factor-This is the interest rate expressed differently and used specifically in the context of car leases.Actually, many experts claim it is better to negotiate with car salesmen as if buying the car outright, and only when the desired figure is reached should a potential lessee reveal that they intend to lease the car and not buy.
It is possible to negotiate this figure down (the same strategy used for buying cars) for a more affordable lease.
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