The term lease penalty, in car leasing, usually refers to the extra fees charged at lease-end for excessive mileage or wear-and-tear.  Lease contracts specify a per-mile charge for any miles that exceed the total miles allowed for a lease. Although not as specific, contracts also state that charges will apply for excessive dings, scratches, unrepaired accident damage, broken or cracked glass, or non-working equipment. In most cases, a contract will specify the size of scratches or … Read More

The term used car lease refers to the process of leasing other than a brand new car. The leasing of used cars is not common in the post-recession economy, although some previously owned luxury cars can be leased from specialty used-car dealers. However, there is one way of leasing used cars that is not commonly known. It involves a lease transfer from someone who needs to get out or their car lease. Read our article, Lease … Read More

The term, trade car, means to use the value of an existing car as credit toward the purchase or lease of a new car. When a car is traded, a dealer buys that car from the owner and gives the owner credit for it’s value as a down payment on a new car — either a purchase or a lease. Since the dealer usually intends to sell the car on his used-car lot, he only … Read More

The term, residualized value, in car leasing refers to the calculation of lease-end residual value on a leased vehicle as well as optional equipment that may be installed on a vehicle. Although the base price of a car will contribute to the residual value, some installed equipment or features may not, depending on lease finance company policy. As an example, let’s say that a particular vehicle has a 50% residual percentage. The vehicle has a … Read More

The terms, lease-purchase or lease-to-own, as related to car leasing are not very appropriate, and are often misused in this regard. These are terms more appropriate to real estate or furniture sales. However, some used car dealers offer what they call “lease” or “lease-to-own” vehicles, which are actually high finance rate purchases or expensive rentals. Car leasing is an alternative method of financing. Purchasing with a loan is the other method. However, these two methods … Read More

The term lease payoff, in car leasing, refers to the process of ending a lease before the normal end-of-lease date. It’s also called a lease termination or early termination. A car lease can be ended early by returning the vehicle and paying off the remaining lease balance, less future finance charges, and less the “realized value” of the vehicle, a process that is explained in the “small print” of all car lease contracts. See our article … Read More

The term, car lease buyout, refers to the process of buying a vehicle that is currently being leased, or for which a lease has just ended.  It means that the lessee (person who is leasing) decides to purchase his leased vehicle before the lease ends, or at the end of the lease. The purchase is made from the lease finance company, not the dealer from which the car was first leased. If the buyout is before the normal end … Read More

The term lease cars for sale refers to cars that have previously been leased and then returned to be sold by used car dealers. The more common term for these types of vehicles is “off-lease.” Dealers who sell off-lease cars generally sell them as “certified” cars, meaning they are relatively new, with low mileage, and have been completely inspected. Such off-lease cars are attractive to customers because they are of high-quality and in near-new condition. Although … Read More

The term, off-lease, refers to vehicles that have been previously leased and returned to the lease finance company — and have been subsequently acquired by a car dealer who will sell that vehicle from his used car lot. Dealers often advertise such vehicles as “off-lease” because it usually implies that the vehicles are relatively new, only had one “owner”, been maintained well, and has no more than average miles. See the following article for additional … Read More

In car leasing, a residual percentage is an expression of how much of a car’s original MSRP sticker price, not selling price, will remain at the end of a lease of specific term (months) and specific mileage. An average car depreciates in value by about 50% over a 3 year lease. The remaining 50% is it’s residual percentage. Some vehicle brands and models have lower depreciation, and therefore higher residual percentages, than others. For example, a … Read More

The term incentives as it relates to new car buying and leasing refers to special promotional offers from a car manufacturer to help sell or lease their vehicles. These offers are usually time-limited, often being good for only one month. Furthermore, the deals are typically restricted to only certain vehicle models and styles. Not all car companies offer incentives every month. Incentives can change from month to month. Forms of incentives are: factory to customer rebates, low interest loan deals, zero … Read More

Car dealers come in two very different forms: 1) new-car dealers and 2) used car dealers. New-car dealers are franchised and authorized by the car company they represent. For example, Ford dealers are authorized by the Ford Motor Company to sell and lease Ford vehicles. They buy their vehicles from Ford and typically use Ford Motor Credit as their “captive” finance company for loans and leases. All new-car dealers are independent businesses and are not … Read More

The term, cooling off period, as it relates to car buying and leasing, is typically confused with the Federal Trade Commission’s 3-Day Cooling Off Rule that applies only to door-to-door sales, health club memberships, and other types of sales — but never to automobile purchases or leases, unless specifically offered by a dealer at the time of purchase or lease. In California, buyers may be offered a 2-day return policy, for which a fee is charged. … Read More

The term, grace period, in car buying and leasing, often (but incorrectly) refers to a period of time in which a customer can change his/her mind and return the car for a full refund. More accurately, it should be called a “cooling off period” or “right-of-return” period. It is commonly thought that there is a 3-day rule or 72 hour law that applies. Unfortunately, there is no grace period or cooling off period for automobile purchases … Read More

Car leasing in Illinois will become much less expensive on January 1, 2015 due to changes in the applicable tax law. Previously, taxes were based on the full value of a leased vehicle, even though the leasing customer never received full use of the vehicle. Now with the new law, tax will be applied to each monthly payment as it is in most other states in the U.S.. For further information regarding the Illinois tax change, search … Read More

A commercial car lease is one in which an individual or company leases a vehicle primarily for commercial or business purposes. Such leases are of the “open-end” type, not “closed-end” as are personal leases. See Types of Leases for more details. Businesses typically lease vehicles for tax and accounting benefits. Generally, all vehicle expenses, including lease costs, can be used as tax deductions, to the extent that the vehicle is used for business or commercial … Read More

A personal car lease, sometimes called a consumer lease, is one intended strictly for personal use and is always a “closed-end” type of lease (not an “open-end” lease, which is used only for business leases). Such leases specifically require that no commercial or business use be made of the vehicle. Doing so would constitute a “fault” and would be grounds for a lease finance company to terminate the lease, repossess the vehicle, and sue for all due … Read More

The term, lease purchase option, in car leasing refers to the option in all lease contracts for the lessee (person doing the leasing) to purchase the vehicle at the end of the lease, instead of returning it. The purchase price is always specified in the lease contract at the time the contract is signed at the beginning of the lease. Such a purchase is made from a lease finance company, not a car dealer. A … Read More

A Lease Deal Calculator is a unique type of car lease calculator that evaluates specific lease deals to determine if a deal is good, bad, or just average by simply entering a few key numbers. LeaseGuide.com provides two such calculators. One is the Lease Deal Calculator and the other is the Lease Evaluator in our Lease Kit. The difference is that the Evaluator is more detailed and provides a more accurate result.