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Additional
Resources
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Auto Insurance And Leasing
By Eric Larson
When leasing a car, its easier to stick with the same company for your auto insurance. What you dont know, however, is that you may end up paying too much for your coverage and its better to Read more...
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Rental Car Sales
Welcome to Cheap Car Rental
— your comprehensive cheap rental cars
resource. Our mission is to give you the facts you need about cheap rental cars
— fast — so you can get on the road to taking action right
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Lease Financing
By Eric Larson
For auto-consumers, crunching the numbers is one of the most difficult and confusing aspects of leasing. Take the finance charge on a lease for instance. Most people just dont understand how this is calculated on capitalised cost AND residual value instead of just the capitalised cost. For most, it seems plainly obvious, just as is the case when purchasing, that a charge should be levied on the capitalised cost of the vehicle. Well, no quite! When you lease a car, youre only using the car over a specified period of time with the option of buying the car.
The residual value represents the loan balance” at the end of the lease. If you add it to the capitalized cost and divide by two, youll
get the average capitalized cost outstanding over the lease term. Let us suppose youre leasing a car with a capitalized cost of $25,000 and a residual value of $15,000. You average balance over the lease term, irrespective of how long it is, is $20,000 - the sum of the two divided by two -.
Using this sum works because the money factor is the annual interest
rate devided by 24, rather than 12. Continuing with our example
and assuming an interest rate of 6% APR: $30,000 X (6 per cent
/ 24) = $75 (Capitalized cost + residual value) X (interest rate
/ 24) = Monthly finance charge This finance charge is added to
the depreciation charge to calculate the monthly payments on your
lease.
Additional
Resources
Tips And Suggestions On Car Rental
By Amy
Thousands of individuals obtain cars from car rental agencies each year, but when it comes to protecting themselves financially while in possession of the car, many individuals have questions about Read more...
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Additional
Resources
The Important Function Of Car Air Filters
By i-AirPurifiers
Increased exposure to these pollutants can produce serious health problems. Benzene is a known carcinogen and VOCs are also likely cancer agents. Almost all the pollutants can irritate the eyes, Read more...
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