Virginia car dealer RK Auto Group defines “Auto Leasing Lingo.”
Virginia car dealer RK Auto Group continues its list of common leasing terms to help you get the best lease deal on a used commercial truck, van or car. Don’t miss What is leasing and how does it work? Part 1 from the Virginia car dealer that believes an educated customer is a happy customer.
The key to getting smart leases on new or used commercial vehicles is understanding leasing terms.
- Capitalized Cost (Cap Cost): The agreed upon price, or negotiated price, of the new or used commercial truck, van or car (as opposed to the asking price).
- Security Deposit: the last month's payment on the used commercial truck, van or car. This will be returned in its entirety if you fulfill all the terms of the agreement, such as on-time payments; staying within allowable mileage (see #7); and normal wear and tear (see #9).
- Allowable Mileage: the number of miles included in the term of the lease (often stated as number of miles per year). An average allowance is 12,000 per year, so on a three-year lease, you would have 36,000 miles.
- Depreciation: the amount by which new or used commercial vehicles lose their value. In leasing, depreciation is the difference between the vehicle’s original cost at lease-start, and its value at lease-end (plus tax, interest and various leasing fees).
- Wear and Tear: When leasing new or used commercial vehicles, the lessee is responsible for any damages incurred during the lease period, or anything beyond what is considered “normal” wear and tear (the exact meaning of which varies among leasing companies). Ask what is considered “normal” when you sign a lease: for example, is scratched paint or a small ding considered normal? This should be written into the contract, but if it isn't, ask that it be added.
- Gap Protection: If you are involved in an accident and your leased vehicle is totaled, insurance will typically cover its actual cash value only. Gap protection pays the gap between the “pay-off” on the lease and the actual cash value of your new or used commercial truck, van or car.
Go back to What is leasing and how does it work? Part 2. Or, go to Part 1 for an explanation on how leasing used commercial vehicles works.
For fast, friendly service, no hassle pricing, and expert advice on leasing new and used commercial vehicles, choose RK Auto Group.
You and your business have unique needs. Ask our commercial leasing experts to find the solution that best suits you. Email mferes@rkautogroup.net or call 757-486-2222. See the advantages of leasing a new or used commercial truck, van or car for your business, from your leading Virginia car dealer, RK Auto Group.