How does a "Lease" work?
Thread Starter
Banned
Joined: Feb 2003
Posts: 690
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From: Kuwait
Mercedes C200K Coupe
How does a "Lease" work?
Pardon me if this is a silly question. But here, they usually don’t lease cars. Well, at least not for more than a couple of months.
Usually if you want to buy a car here you either pay in cash or make a plan with some bank.
But lease for a couple of years? That’s really a new thing for me.
Could anyone explain please? (I’m 19. so be patient with me :p)
Usually if you want to buy a car here you either pay in cash or make a plan with some bank.
But lease for a couple of years? That’s really a new thing for me.
Could anyone explain please? (I’m 19. so be patient with me :p)
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Joined: Nov 2002
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From: Genoa, NV
2014 GLK250 BlueTec & 2009 ML320 BlueTec
A lease is like renting. You don't have to put down a heavy down payment, like when buying a car and the monthly payments are lower, because you are only paying for the time you are using the car.
At the end of your lease, you have three choices, one, is to return the car and walk away, second, you can buy it and third, lease it again.
Hope it helps.
At the end of your lease, you have three choices, one, is to return the car and walk away, second, you can buy it and third, lease it again.
Hope it helps.
Thread Starter
Banned
Joined: Feb 2003
Posts: 690
Likes: 0
From: Kuwait
Mercedes C200K Coupe
Originally posted by theine
A lease is like renting. You don't have to put down a heavy down payment, like when buying a car and the monthly payments are lower, because you are only paying for the time you are using the car.
At the end of your lease, you have three choices, one, is to return the car and walk away, second, you can buy it and third, lease it again.
Hope it helps.
A lease is like renting. You don't have to put down a heavy down payment, like when buying a car and the monthly payments are lower, because you are only paying for the time you are using the car.
At the end of your lease, you have three choices, one, is to return the car and walk away, second, you can buy it and third, lease it again.
Hope it helps.
So, how do they usually calculate it? and the lease get lower the more you intend to keep the car?
Lets assume the car is 60K and you want to lease it for three years. how much the lease is going to be?
MBWorld Fanatic!
Joined: Mar 2002
Posts: 2,934
Likes: 387
From: Kenilworth, il usa
GT63S ePerformance 4dr, '25 Bentayga Black Ed.(wife), Wrangler and 250 MLB(kids)
Your lease payment includes depreciation(estimated) of the car during the term and interest on the full price.
Since different cars depreciate faster or slower(ie M3 vs Audi A8)
even with the same selling price of the cars ,the lease payment will vary.The "closed end" lease contract specifies the allowed mileage for the term,so you are protected from any fluctuations of the market and at the end of the term you can return the car without any further obligations.
"open end" lease is not limiting your mileage but you are responsible for the difference in value of the car at the end of your term.
Since cars usually depreciate faster in the first 2 years the lease payment has to cover correspondingly higher depreciation,hence your lease payment will be much higher on short term lease(1-2 years)
I hope I this will help.
Since different cars depreciate faster or slower(ie M3 vs Audi A8)
even with the same selling price of the cars ,the lease payment will vary.The "closed end" lease contract specifies the allowed mileage for the term,so you are protected from any fluctuations of the market and at the end of the term you can return the car without any further obligations.
"open end" lease is not limiting your mileage but you are responsible for the difference in value of the car at the end of your term.
Since cars usually depreciate faster in the first 2 years the lease payment has to cover correspondingly higher depreciation,hence your lease payment will be much higher on short term lease(1-2 years)
I hope I this will help.
Thread Starter
Banned
Joined: Feb 2003
Posts: 690
Likes: 0
From: Kuwait
Mercedes C200K Coupe
Originally posted by absent
Your lease payment includes depreciation(estimated) of the car during the term and interest on the full price.
Since different cars depreciate faster or slower(ie M3 vs Audi A8)
even with the same selling price of the cars ,the lease payment will vary.The "closed end" lease contract specifies the allowed mileage for the term,so you are protected from any fluctuations of the market and at the end of the term you can return the car without any further obligations.
"open end" lease is not limiting your mileage but you are responsible for the difference in value of the car at the end of your term.
Since cars usually depreciate faster in the first 2 years the lease payment has to cover correspondingly higher depreciation,hence your lease payment will be much higher on short term lease(1-2 years)
I hope I this will help.
Your lease payment includes depreciation(estimated) of the car during the term and interest on the full price.
Since different cars depreciate faster or slower(ie M3 vs Audi A8)
even with the same selling price of the cars ,the lease payment will vary.The "closed end" lease contract specifies the allowed mileage for the term,so you are protected from any fluctuations of the market and at the end of the term you can return the car without any further obligations.
"open end" lease is not limiting your mileage but you are responsible for the difference in value of the car at the end of your term.
Since cars usually depreciate faster in the first 2 years the lease payment has to cover correspondingly higher depreciation,hence your lease payment will be much higher on short term lease(1-2 years)
I hope I this will help.
couple more questions though... when u lease a car, is it registered in ur name as if you bought it? you can leave the country with it or something?
one last question... and that might sound silly... but do you feel is if it was your own car and not a rental?! heh.
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MBWorld Fanatic!
Joined: Mar 2002
Posts: 2,934
Likes: 387
From: Kenilworth, il usa
GT63S ePerformance 4dr, '25 Bentayga Black Ed.(wife), Wrangler and 250 MLB(kids)
Car is registered to you and the leasing co. but the title is held by
them.You can travel with no restrictions but you can not modify the car (at least you are not supposed to)
them.You can travel with no restrictions but you can not modify the car (at least you are not supposed to)
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