Do they charge interest in a lease?
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MBWorld Fanatic!
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C280
Do they charge interest in a lease?
When i look at these lease rates i never see where they talk about the APR that they are going to charge. Wehre can i find this out? Some people told me that dealerships dont charge interest in a lease and only i a purchase?
Senior Member
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From: So. Cal
2024 S580 | 2024 Escalade ESV Sport Plat | 2022 X5M Competition
If you look at the lease document, the total interest charged is called the "rent charge."
Thread Starter
MBWorld Fanatic!
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C280
so the rent charge is actually the interest rate? But thats not like getting charged the regular interest rate if a purchase was made, is it? or does it come out to the same amount of money?
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Joined: Jan 2002
Posts: 469
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From: So. Cal
2024 S580 | 2024 Escalade ESV Sport Plat | 2022 X5M Competition
When you lease a car, you're essentially getting a loan for the total price, then over time, you're paying for the depreciation and interest on that loan. In a lease, you don't pay down principle, so you end up paying interest on the full amount of the car throughout the lease term. For example, let's say you lease a $100K S class at 10% interest (or whatever the money factor for 10% is) for 3 years, you will end up paying $30k, or $10/year in interest. $30k will be called the "rent charge."
If you had financed the car over 3 years, at the same 10% interest rate, you will pay a little over $16k in interest because you pay down your principle and thus pay interest on a smaller and smaller amount every month.
Hope this helps.
