Leasing Terms to Familiarize Yourself With

December 15th, 2022 by

Car leasing has its own complex lexicon that can easily be overwhelming. There are a number of options to consider, fees that may or may not apply, and terms that are not immediately clear to laypeople, all of which together can make the process seem more intimidating than it actually is. Once you understand these leasing terms, the process will become much clearer — let’s explore a few.

Starting Your Lease

When you lease a Jeep® SUV, for example, you are in effect renting it rather than buying it. The lessee is you, and the lessor is the company that is leasing the vehicle to you. Your base monthly payment is the amount you will have to pay per month to cover your lease, including depreciation and financing charges.

Depreciation is the amount you pay to cover the decreased value of the car due to your use of it and the passage of time. You will also have to pay monthly sales and use taxes with your monthly payment and may have to put down a security deposit before you can drive your car off the lot.

Ending Your Lease

It’s important to know whether you have a purchase option on your leased vehicle. With a purchase option, you have the opportunity to buy your vehicle at the end of your lease, which might be attractive if you’ve grown attached to it. It’s also vital to know whether your lease is closed-end or open-end, as an open-end lease will leave you responsible for the difference between the real value of the car and the residual value agreed to at first.

Leasing doesn’t have to be intimidating, so come down and talk to our Jeep finance department today. They’ll help you get set up with a new lease so you can roll off the lot as soon as possible.

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