Frequently Asked Questions
(Adjusted Capital Cost + Residual) * Money Factor + (Adjusted Capital Cost – Residual)/Lease Term.
This depends on a couple of different factors. The make and model that you are looking at plays a big factor in determining which is better for you. Every model has a different determined residual value by the manufacturers bank. The money factor(effective cost of borrowing the money from the bank) also plays a role in what you will pay for a lease. All that being said, Generally, if you intend on keeping the car for less than 6 years, leasing is a more cost effective option. It may seem complicated and hard to choose which one is better for you, Luckily, here at Exquisite Auto Lease we do both leasing and sales and can provide you with both quotes and enough information for you to make an educated decision.
Money factor is the rate you are being charged for taking a loan, on a lease, from the bank. It was developed for simplicity of calculating leases but also leads to some ambiguity as unlike an APR, regulation does not require the bank or dealer to disclose the money factor. As dealerships are not required to disclose the money factor of a given lease, they tend to also mark up the money factor to increase their back end profit. Multiplying the money factor by 2400 will give you the equivalent APR. We believe in transparency when dealing with our clients and will always provide the money factor when asked. Through relationships with our network of dealers, we also make sure that our sell rate is the same as the buy rate.
The sell rate is the interest or money factor rate that the dealer provides to the customer/end user.
The buy rate is the interest or money factor rate that the bank provides to the dealership.
Cap cost reduction vs down payment.
Sales tax varies by where you live. Some states are mor
As a general rule, auto leases are not breakable. However, you do have a few options if you decide you want or need to get rid of your leased vehicle. The first option would be taking the car to a dealership like carmax and get an appraisal of the vehicle. You would need to contact the bank that your lease is with and ask them for a dealer pay off. If your car has positive equity, carmax can buy your vehicle and cut you a check for the difference between the appraisal amount and the payoff. If it has negative equity, you would have to cut carmax a check for the difference, and if the payoff is exactly what the appraisal was for, you can walk away clean.
The second option is a lease transfer. Leasetrader.com and Swapalease.com are great resources for helping to facilitate a lease transfer. They charge a nominal fee and allow you to post your car on their website to see if any of their site visitors is interested in taking over your lease. If you find someone interested, they also have lots of information on the process and can help guide you through the process. Keep in mind, some banks don’t allow for one or both of these options to be used. If you are someone that gets bored of cars quickly, make sure to ask if the bank allows it.
Acquisition fee is the term used in auto leasing for what is essentially a closing fee or loan origination fee.. It covers the banks administrative costs involved in arranging the lease. The acquisition fee(if the bank charges one) is a fee that everyone pays. Like with money factors, dealers do have the ability to mark up the acquisition fee without notifying you. The acquisition fee needs to be displayed on the contract, however the dealer is not required to tell you if they are marking it up. It is very rare for a lease done through a broker to have a marked up acquisition fee.
Disposition fee or turn in fee are the terms used in autoleasing for the fee paid at the end of the lease when the car is returned to a dealer. The bank charges a disposition fee to cover its costs in “disposing” of the vehicle. When you turn in a lease to a dealership, the bank needs to send a truck to pick up the car and take it to the auction as well as pay to prepare the car for sale. The disposition fee is meant to cover these costs. Unlike the acquisition fee, the disposition fee cannot be marked up for additional dealer profit. The disposition fee needs to be stated on the contract. If instead of giving the car back to the dealership, you sell the car to carmax or any other buyer, you do not pay the disposition fee. Additionally, if you get another car from the same manufacturer and us the same bank to finance it, the bank will waive the disposition fee.
What is a leasing broker
Dealerships have a lot of overhead expenses. If a dealership where to heavily discount cars to everybody that walks into the dealer, chances are they would not stay in business for a long time. Alternatively, if they keep their gross profits up on walk in customers but choose to do business with brokers to boost their volume, they can actually make more money in the long run. By working with brokers they can maintain their profit on there walk in customers, but by choosing to work with brokers they can increase their volume significantly. Dealerships are given quotas to meet by the manufacturers. When those quotas are exceeded by a certain percentage it means more perks from the manufacturer. Those perks include retroactive incentives on all cars sold for the month, more allocations on limited production and harder to get cars, and more pull to get border line credit deals approved.
As such, an auto broker can be a valuable asset to have if you are looking for a good deal and great service. Through our relationships with the dealers and the volume that we provide them with, we are afforded heavy discounts on vehicles. Our overhead is very low in comparison to a dealership, and we are able to pass our savings onto our clientele.
