Chevy Lease Terms to Know
If you’re thinking about a Chevy lease, you are making a wise decision. While buying certainly has its merits, leasing gives you a lot more flexibility.
Before you sign on any dotted line, however, it pays to familiarize yourself with some of the leasing terms you’ll probably encounter. This is why Lafontaine Chevrolet put together this helpful guide:
While this may sound like some sort of gameshow, the money factor is actually the interest rate, just calculated differently. For example, if the money factor is 0.0015, the interest rate is 3.6%. All you need to do is multiply by 2,400.
This is essentially the fee you will pay for having the lease for your Chevy processed. Typically, it’s a pretty nominal expense.
Capitalized (Cap) Cost
The cap cost is the negotiated price of the car, as well as any extra costs, such as the acquisition fee.
Capitalized Cost Reduction
Anything that can be used to lower the cap cost falls under cap reduction. This could include your down payment, rebates, or a trade-in allowance.
When you return your Chevy SUV at the end of the lease, it won’t be worth the same as it was at the beginning. Over that time period, it will experience depreciation, which is a loss in value.
The residual is what your vehicle is worth when the lease is over. Generally, the residual value is determined even before you sign a lease.
The length of your lease is called the term, and it’s usually between 24 and 60 months. If you want a lower monthly payment, consider a longer term. This will, however, probably result in a higher interest rate.
Gap insurance is very important when leasing a car, as it offers protection if the car is totaled or stolen. In many cases, the lease automatically comes with this coverage.
If you’ve never leased a car before, we understand that this process can be confusing. If you have questions or need more information, feel free to get in touch with our Chevy dealership near Dexter, MI