Untitled 1
COMMON
LEASING QUESTIONS AND ANSWERS
1.
I like to
own my vehicle.
a.
Buy
appreciating assets
b.
Lease
depreciating assets
c.
Known
fixed cost of lease up front
d.
Less
risk of value
dropping due to gas prices, etc.
e. Buy the vehicle at lease end for a value known
from the beginning
2.
Isn’t
conventional financing better?
a.
You
only pay for what you use in a lease
b.
You have
a fixed price option at lease end
c.
You can
drive more vehicle for the same or lower payments
3.
Is my
insurance going to cost more?
a.
Requirements are the same as most finance terms
b.
You
probably already have the proper coverage
c.
Cost
should be about the same
4.
What
happens if my car is totaled?
a.
GAP
protection is included in the lease at no charge.
b.
GAP will
cover all additional obligations over and above insurance deductable when the
insurance settlement is received
5.
I leased
once in the past and got “burned.”
a.
Did you
allow for the proper miles you drive?
b.
Were you
in an open end lease and owed more on the vehicle at lease end?
c.
Changes
in federal and state disclosure laws made leasing safe
d.
Closed-end leases are consumer friendly with everything spelled out up front
6.
I trade
frequently.
a.
Tailor
your term to your needs
b.
The
same payment as conventional financing will typically have a shorter
lease term.
7.
What am I
paying for this vehicle?
a.
You are
only paying for the part of the vehicle you use
b.
Very much
like an apartment lease
c.
MSRP and
your sale price are fully disclosed
8.
I have
always paid cash.
a.
Cash is a
better use for investment in appreciating assets
b.
A vehicle
is a poor savings plan
c.
Leasing
eliminates your risk of depreciation
9.
What if I
want to trade early?
a.
Not
a problem!
b.
Select
the proper program and term now – 24, 36, 39 or 48
c.
It
is the same as financing a vehicle for five years and trading in two
10.
I drive
too many miles.
a.
Choose
lease miles to match your driving habits. Up to 35,000 per year!
b.
Lowest
cost to drive for high mileage drivers
LEASING
TERMINOLOGY
Lessee:
The customer – user of the lease property.
Lessor:
The dealership, who then assigns it to a lease company.
Closed-End Lease:
Lessor guarantees a fixed purchase price at the end of the lease
term no matter what happens in the market.
Depreciation:
the difference between MSRP and the estimated value of the vehicle at the lease
end.
Gross Capitalized Cost:
The starting balance of the lease.
The MSRP plus the lease administrative fee and any equipment and contract
add-ons; similar to the Sales Price in conventional financing.
Capitalized Cost Reduction:
Items that will be subtracted from the Gross Capitalized Cost above.
This includes rebates, dealer discount, customer cash
down, positive trade equity, etc. to be deducted from the Gross
Capitalized Cost; similar to a down payment in retail.
Adjusted Capitalized Cost:
The amount remaining after the Capitalized Cost Reduction is subtracted
from the Gross Capitalized Cost; similar to amount financed in
conventional financing.
Residual Value:
Guaranteed end of lease term value of the lease vehicle.
This value is established at the beginning of the lease.
Typically use Automotive Lease Guide (ALG) percentages.
Security Deposit:
Amount equal to the payment rounded up to the next $25.
Used to provide protection against damage to the vehicle beyond the
defined wear and tear. Refundable.
Administrative Fee:
Covers the administrative cost involved in providing and servicing the lease.
GAP Protection:
Included in every Nissan lease with NILT.
This protection relieves properly insured lessees of any deficiency on
the lease if the lease ends early because the vehicle is a total loss including
the early termination charge minus the insurance deductable.
