Essential Luxury Car Lease Terms to Know

If you’re looking into a luxury car lease, you may quickly come across some terms that could be a little confusing. This guide aims to help simplify things by defining the most important lease terms. Join the experts at the Lyon-Waugh Auto Group to learn more.

Term

The term refers to the length of the lease. You can generally get a lease between 12 and 60 months, but 36 months (three years) is the most common option.

Money Factor

This is the interest you will pay on the lease. It will be represented by a number like this: 0.0025. When you multiply that by 2,400, you will get a more understandable percentage.

Cap Cost and Cap Cost Reduction

The cap cost is the total amount of the lease. In addition to the price of the vehicle, it includes any other expenses, such as service plans or gap insurance (see below). The cap cost reduction is anything that lowers the cap costs, such as trading in a vehicle.

Residual and Depreciation

The leasing company will want to know what the value of your car will be when the lease expires, and this is the residual. Its loss in value is known as depreciation.

Gap Insurance

Gap insurance is something that will be included with your lease, and it benefits you as well as the dealership. If your car is stolen or totaled in an accident and you owe more money than it was worth, gap insurance will give you the funds needed to cover the difference.

Need More Info About Leasing? Contact Lyon-Waugh Auto Group in Greater Boston, MA

If you have questions about a luxury lease, get in touch with Lyon-Waugh Auto Group. If you’re looking for an Acura, BMW, Land Rover, or MINI lease near Boston, a Mercedes-Benz lease in Burlington, or an Audi lease in Nashua, NH, our team is here for you. Contact us today!

Posted in Finance | No Comments »