Leasing Information
Open-Ended Lease
A rental agreement that obligates the lessee to make a balloon payment at the end of the lease to make a balloon payment at the end of the lease agreement amounting to the difference between the residual and fair market value of the asset.
Closed-Ended Lease
An agreement that there is no obligation on the lessee to purchase the leased asset. ( John Hinderer Motorsports uses this type of ended lease )
Leasing Terms
- Guaranteed Future Value - Value (Residual - which is the amount owed after you lease has ended)
- Monthly Investments - The amount owed for the leased vehicle each month.
- Start-ups/ up-Fronts - 1st payment, state titling, Acquisition, License Fee
- Capital Cost - Total amount that the lender is giving the lessee
- Cap Cost Reduction - Upfront payment that reduces the cost of financing
- Money Factor - Amount of interest charged by the lender
- Disposition Fee - Lease turn in fee of $350 (settled with Chrysler Financial)
Advantages to Leasing
- Not investing in a depreciating asset
- Lower monthly payment investments (40% less than buying)
- Lower initial investment
- Reduced tax obligations in most cases
- Only taxed on what you use of the vehicle
- Under Warranty for 36 months
- Shorter ownership, new vehicle every 3 years
End of Lease Options
- Buy out the Lease
- Trade the leased vehicle
- Sell the leased vehicle
- Turn in the vehicle