Some leasing terms that you should know

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Some leasing terms that you should know

Leasing a car can be a complicated process, especially if you’ve never done it before and you’re not exactly sure how it works. If that sounds like you, then you’ve come to the right place. At Pfaff Leasing, we make it very easy for our clients to get behind the wheel of the vehicles they want to drive and need to drive. With leasing locations in Vancouver, Toronto, and Calgary, our clients can take advantage of our vast network of connections to find their vehicle leasing solutions. If you are wanting to lease a performance car, vintage car, or commercial vehicle, but you have never leased before, then there are some leasing terms that you should be made aware of for the process. In this article by Pfaff Leasing, we share some information about a few of these leasing terms. 

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The Acquisition Fee 

An acquisition fee, sometimes called the “bank fee,” is the amount of money charged by a bank or an automaker for processing a new lease. Sometimes you can get these fees rolled into your monthly lease payments. If the acquisition fee isn’t rolled into monthly payments, you’ll have to pay it upfront, even on leases that advertise no down payment at signing.

The Disposition Fee

Commonly, with car leases, the disposition fee will be charged at the end of the car lease when you are bringing it back to the dealer or leasing company. The disposition fee is a charge that covers taking back ownership of the leased vehicle by the leasing company. Cleaning, maintenance, detailing, and preparing paperwork for resale for example.

Down Payment 

A down payment in the leasing world works very much like a down payment in the world of traditional car financing. In essence, a down payment is an initial payment on the vehicle before you have to make any monthly payments. A down payment is not always required for a car lease, but it is very common practise, and it can help to lower your monthly lease payments depending on how much you put down initially.

Security Deposit 

Just like leasing an apartment or a house, leasing a car often requires a security deposit. This money, typically equal to about one month’s payment, guards against any damage to the vehicle during the lease. It’s also refundable if there aren’t any damages when you turn in the vehicle.

 

Residual Value 

Residual value is the predicted amount of money that your car will be worth when the lease ends. It’s also the amount of money that your lease payment is based on, which is why cars that benefit from a high residual value tend to have lower payments than vehicles that depreciate more rapidly.

When you are wanting to lease a vehicle, it is essential to become familiar with these terms mentioned above. While you are in the initial stages of the vehicle leasing process you will hear these terms frequently. At Pfaff Leasing, we make it easy for you to get behind the wheel of the cars you have always dreamed of, or the commercial vehicles you need to run your business.

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