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Single-Payment Lease

April 18, 2010 by  
Filed under Car Loans

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A pay as you go lease is a brand new kind of lease which has made its foray into the market in recent times. In this lease, shoppers forgo the cycle of lease funds if they make a large payment at first of the lease.

There are two amounts in a traditional lease that incur charges and determine your month-to-month lease payments. First, there is a depreciation cost which accounts for the value the automobile loses during the lease term. Second is a residual amount which is the projected worth of the automobile at the tip of the lease. The sum of those two costs offers the monthly funds on your lease.The idea behind a pre-paid lease is to remove the finance expenses for depreciation and solely account for residual value expenses in a single, pre-paid fee at first of the lease.

Single-payment leases are devised with spendthrifts in mind: no cycle of monthly funds, a brand new car each two to three years and no real interest in purchasing the car on the end of the lease. You need to only consider this type of lease if you’re involved about not being able to make monthly payments and have a number of money upfront.

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