Manufacturer subsidized auto lease

The manufacturer subsidized lease is one of the most sought after types of leases.

The dealership may have a urgency to move the vehicle lease off the lot, whether it be for new shipments arriving or the need to get rid of older models.

The manufacturer may offer a very low interest rate on the vehicle, or increase the residual value of the car than the average lease. Essentially any loss due to the a ‘massaged’ residual value by the manufacturer is the consumers gain.

The manufacturer subsidized lease is also known as the “subvented lease”.

Car Leasing 101 – The Basics

Welcome to the first step in our online auto leasing school. In our car leasing 101 you’ll learn the very basics and foundation of auto leasing.

At this point we’ll assume you do not know what car leasing is, or you have a very general knowledge of it, or you’re simply seeking a refresher. Either way, car leasing 101 is to simplify the concept of auto leasing and the basic understanding of what car leasing is, the types of leases, differences in financing via leasing versus other methods, and more.

So let’s get started…

  • What is car leasing?
  • Why lease a car?
  • Types of auto leases
  • closed end leases
  • open end leases
  • manufacturer subsidized leases
  • Auto leasing versus buying
  • Auto leasing versus renting
  • Is leasing right for you?
  • How auto leasing works
  • What is a short term auto lease?
 Think you know this stuff already? Great! Let’s get into auto leasing 201.

Open end car lease

The open end lease is similar to the closed-end lease, with the major difference being that the consumer leasing the car will be financially responsible for the difference in value if the residual value of the vehicle is less than the actual market value at the end of the lease. This is why before leasing a car its important to learn how to calculate lease payments, along with an understanding of end of lease charges by the leasing company. If the market value if worth less at the end of the lease agreement, you’ll be responsible to pay the difference.

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Car leasing versus renting

Is there a difference between car leasing and renting a car? Absolutely! There are differences in obtaining a car through car leasing versus renting a car versus financing a car. Fundamentally the differences may sound similar, but it’s important to know and understand these differences.

Rent a Car

Renting a car is pretty much what is says. You pay x dollars at a set frequency (ex. hourly, daily, weekly, monthly). Renting a car is typically for a very short period of time, unlike car leasing which is 24, 36, 48 months (unless you take over a short term car lease on a lease transfer). When an individual rents a car, they typically incur a higher cost / fee for the time spent driving the vehicle. Continue reading “Car leasing versus renting” »

How car leasing works

If we’ve answered your question on what is auto leasing, let’s know look at how it works. The more confident you are knowing the details and understanding how auto leasing works, the better equipped you’ll be when you make your lease decision.

Those who choose not to educate themselves first on leasing, will make themselves prone to losing out on a good lease deal, how to calculate lease payments – your monthly expense, and the info you should know when negotiating a lease agreement. The end result may cost you some serious costly mistakes and the possibility of feeling cheated. So like anything new that you’re investing into – do your homework and educate yourself.

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