- Capitalized Cost: This means the overall price of the car. This could be a reference to the MSRP (Manufacturer's Suggested Retail Price) or the price determined through negotiations.
- Residual Value: The value the car will be at the end of the leasing agreement.
- Money Factor (Rate): The interest rate of the loan being issued. This is not displayed as an annual percentage. It is possible to negotiate this rate as well.
- Capital Cost Reduction: What this really means is a down payment. Leasing agreements usually do not include capital cost reduction as anything other than an incentive.
Money and where to get it is often the main concern when trying to purchase a new car. Due to this, many people find the idea of leasing particularly attractive. In most cases, it is far more manageable to sign a new Honda Civic lease over buying it outright, whether you live in Chicago or Los Angeles.
When considering leasing, there are a few things every potential buyer should know.
Leasing Terminology
Understanding the terms of an agreement are crucial to ensuring it will beneficial. When it comes to leasing, these terms are important to understanding exactly what everything means.
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