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Your Rent Charge (or Finance Fee) is the cost you pay to your leasing company for the use of the money that purchased the car. If you took out a loan, you would pay this in the form of a straight interest payment.
If the dealer provides a “rent charge” or “lease charge,” add the residual value to the net capitalized cost. Then multiply that total by the number of months in the lease term. Divide the rent charge or lease charge by this number to compute the money factor.
Rent Charge. The term, rent charge, in a car lease contract is used to show the total of all finance charges for the life of the lease. It's sometimes called Lease Charge or Lease/Rent Charge. The term is deceptive because it has nothing to do with renting.
Depreciation. Interest. Tax.
Divide the depreciable amount of the lease by the number of lease months. This determines the amount of monthly depreciation on the leased equipment. Assume the depreciable cost of the lease equipment is $20,000 and the lease ends in 60 months.
Definition. Your vehicle rent charge is what you pay for the right to spread out your payments. Rent charges are similar to the concept of interest charges on a car purchase. For instance, a $500 car payment may comprise $450 of principal and $50 of interest.
Definition. Your vehicle rent charge is what you pay for the right to spread out your payments. Rent charges are similar to the concept of interest charges on a car purchase. ... Rent charges are also referred to lease charges. They're determined by the money factor, or implied interest, in the contract.
Calculating the Financing Portion of the Lease Payment. ... If the dealer provides a “rent charge” or “lease charge,” add the residual value to the net capitalized cost. Then multiply that total by the number of months in the lease term. Divide the rent charge or lease charge by this number to compute the money factor.
A car lease lets you drive a new vehicle without paying a large sum of cash or taking out a loan. To lease a car, you simply make a small down payment less than the typical 20% of a car's value you'd pay to buy followed by monthly payments for the term of the lease. When the term expires, you return the car.
A full manufacturer's warranty is included in the lease price. This covers all parts excluding wear and tear items such as brakes and tires. Providing your lease is for 3 years or less than your car will be covered for the duration of your contract. Read more about what is covered by a manufacturer's warranty.
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