Cap Cost, Residual Percentage and Money Factor
#71
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Please correct me if I am wrong, but I believe all leases are "closed-end," which benefits the lessee -- you and me. If you purchase the vehicle at the end of the lease, it doesn't matter if the lease is a closed-end or an open-end lease--you pay the residual amount stated in the lease and the vehicle is yours.
Where is does matter is if you decide not to purchase the vehicle at the end of the lease. In that case, in an open-ended lease you owe the lessor (Audi Financial) the difference between the residual amount stated in the lease and the actual market value of the vehicle. If in fact the market value of the e-tron has plummeted at the end of the lease, the lessee could owe Audi Financial a substantial additional payment.
This is my understanding from having generally leased vehicles over the years. I always make it a point to ask the finance manager to point out two provisions in the lease agreement: 1) the closed-end lease provision and 2) the inclusion of "gap insurance." Both were always important to me.
Where is does matter is if you decide not to purchase the vehicle at the end of the lease. In that case, in an open-ended lease you owe the lessor (Audi Financial) the difference between the residual amount stated in the lease and the actual market value of the vehicle. If in fact the market value of the e-tron has plummeted at the end of the lease, the lessee could owe Audi Financial a substantial additional payment.
This is my understanding from having generally leased vehicles over the years. I always make it a point to ask the finance manager to point out two provisions in the lease agreement: 1) the closed-end lease provision and 2) the inclusion of "gap insurance." Both were always important to me.
#76
don't understand
After receiving a 9,800 cap reduction, no sales tax in NJ and a trade in allowance of 38,000.00, with 2,500.00 down, your monthly payment is 1283.00. what am I failing to comprehend?
#78
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Please correct me if I am wrong, but I believe all leases are "closed-end," which benefits the lessee -- you and me. If you purchase the vehicle at the end of the lease, it doesn't matter if the lease is a closed-end or an open-end lease--you pay the residual amount stated in the lease and the vehicle is yours.
Where is does matter is if you decide not to purchase the vehicle at the end of the lease. In that case, in an open-ended lease you owe the lessor (Audi Financial) the difference between the residual amount stated in the lease and the actual market value of the vehicle. If in fact the market value of the e-tron has plummeted at the end of the lease, the lessee could owe Audi Financial a substantial additional payment.
This is my understanding from having generally leased vehicles over the years. I always make it a point to ask the finance manager to point out two provisions in the lease agreement: 1) the closed-end lease provision and 2) the inclusion of "gap insurance." Both were always important to me.
Where is does matter is if you decide not to purchase the vehicle at the end of the lease. In that case, in an open-ended lease you owe the lessor (Audi Financial) the difference between the residual amount stated in the lease and the actual market value of the vehicle. If in fact the market value of the e-tron has plummeted at the end of the lease, the lessee could owe Audi Financial a substantial additional payment.
This is my understanding from having generally leased vehicles over the years. I always make it a point to ask the finance manager to point out two provisions in the lease agreement: 1) the closed-end lease provision and 2) the inclusion of "gap insurance." Both were always important to me.
GAP is part of any lease I’ve ever seen. It’s optional (state by state basis) on most car loans.
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This is why I was surprised when you posted "yes" to perlfather's inquiry:
SCarGuy
Quote:
Originally Posted by perlfather
I am considering leasing instead of the usual buying and am wondering are these open leases in the sense that the buyer has the option of buying the car at the end of the lease for the residual value?
YesOriginally Posted by perlfather
I am considering leasing instead of the usual buying and am wondering are these open leases in the sense that the buyer has the option of buying the car at the end of the lease for the residual value?
You are correct that all leases have gap insurance and the only one being used today are closed-end leases, but old habits die hard, so I suppose I will always ask. Best regards.
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