Car leasing maze

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Well I’ve actually never really understood leasing and car financing, but with cars where you want them for a short while it makes some sense. Particularly where there is technology risk and you want to swap up in a short period without the backend risk of what the car is worth when you sell it.
And there are quite a few options for say a BMW i3.
Maybe that’s why so many folks end up leasing Teslas (they do have a guarantee for buyback by the way)
So here is a quick overview:

 Basics of leasing

As with any industry, there are a host of terms that you have to figure out:

  • The full retail/sticker price (MSRP) of the car.
  • The “agreed-upon price” you’ve negotiated for the car. This is super important so negotiate hard for this.
  • The amount of the drive-off check, with each element detailed. Which are the acquisition cost (this is the non-negotiatble fee from the leasing company)
  • The “final,” or “net,” or “adjusted” capitalized cost, with details of anything that’s been added to or subtracted from the agreed-upon price of the car to get to the total.
  • The residual value, which is always stated as a percentage of the vehicle’s full retail/sticker price (MSRP). Dealers will quote this either as a percentage or a dollar figure.
  • The “money factor” or interest rate the leasing company is using.
  • The monthly payment. In most states, they also charge sales tax on this. With EVs in Washington State though, there is no sales tax (so in effect a 9% rebate)
  • The annual mileage allowed. You have to pay a per mile penalty if you go over, but don’t get anything back if you go under, so you really if it is 10K miles/year, then you want

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