Terms to Know Before Leasing A Vehicle - Leasing Jargon Simplified
So, you’ve decided that you want to lease that next vehicle. Can’t really blame you. With today’s incentives, rebates, and favourable lease rates why wouldn’t you. Not only do you get to drive a new car, but a new car that you wouldn’t otherwise be able to afford if you were to purchase and finance it. Buyer beware though. With leasing comes new and sometimes rather confusing vocabulary. Don’t get lost in a sea of leasing jargon. Protect yourself. Learn and understand the industry language. For those seriously thinking of leasing that next vehicle, here is a useful glossary of "new" terminology that you should familiarize yourself with BEFORE you negotiate a lease:
Acquisition Fee: An administrative charge levied by the leasing company for processing a lease. This fee is typically NOT negotiable and can have a significant bearing on the overall cost of the lease.
Base Interest Rate: This is the cost of leasing and using a vehicle and is measured by the interest paid over the lease term.
Buy at end-of-term interest rate: This is the net interest rate for the lease if the lessee, at the end of the lease term, purchases the vehicle at the end-of-lease purchase price.
The Leverage of the Lease
In today’s rapidly changing business environment it makes sense to consider all the options before paying for your business equipment ? whether it’s a photocopier, computer system, computer hardware or software, telephone system, security equipment, office furniture or anything else. Many business people will give great consideration to the actual purchase, getting quotes from different suppliers and considering different choices. When it comes to paying, however, they simply pay cash or use bank finance without fully exploring the available options.
Most businesses will think of leasing for cars, yet don’t consider this option for equipment. Either managements don’t realise that leasing companies will lease items with little or no second-hand value; or they don’t know which way to turn to get expert help or advice. Again they don’t realise that the leasing broker ? a concept pioneered by Technology Leasing ? came into being precisely to meet that need.
Increase Your Business Growth and Cash Flow Through Equipment Leasing
“If it can be manufactured, it can be leased.” For the past decade or so, this statement has become more and more true to fact. From computer software to commercial aircraft, equipment leases are utilized day in and day out in a constantly changing and highly aggressive business environment worldwide. To gain or to keep the edge over their competitors, companies of every type and size are constantly looking for creative ways to conserve working capital while expanding operations. Many have turned to leasing their equipment to help in the effort. For this reason, the leasing industry is being defined as a major player in equipment financing today.
So, why should you join these businesses in choosing to lease? Well, one key factor is that the commencement of a lease can be done with very little out of pocket expense. Two advanced payments or an equal security deposit is usually all that’s required. Couple this with the fact that for many leases, particularly those under $75,000, a simple one page credit application is all that is needed to be considered for approval. Compare this against an equipment loan, with it’s more extensive paperwork and the resulting 10 to 50 percent down payment required to begin the transaction.
Explore An Effective Revolutionary Approach To Traditional Business Financing
For business owners who need working capital now there is a revolutionary, tax-deductible cash flow solution that frees up capital and gives them the money they need to grow. This diversified cash flow solutions is known as "asset leasing."
With an asset lease, business owners can obtain quick cash for any company need by simply selling their equipment and leasing it back. Businesses not only receive immediate working capital or cash, most also realize significant tax savings from converting the assets into liabilities and by deducting the entire monthly lease payment as an operating expense.
This cash flow financing solution is available to all businesses and industries who own virtually any type of equipment including industrial, medical, automotive, food service, construction, office automation, audio/video, printing, packaging and much, much more.
Business owners love the ease and flexibility of this financing vehicle when compared to a traditional bank loan. Bank loans that involve used equipment as collateral are usually time consuming, often requiring substantial application fees, down payments etc. and collateral coverage well above the value of the financing. Most bank loans will also require the business to stipulate in detail exactly how the funds will be used.
What to Consider Before Leasing a Car
Some people choose to lease a car rather than buying one outright. Here are some useful tips on what to consider before leasing a car:
The most important thing to remember is that you do not own the vehicle. You get to use it but must return it at the end of the lease unless you choose to buy it.
Up-front costs may include the first month’s payment, a refundable security deposit, taxes, registration and other fees and other charges.
Monthly lease payments are usually lower than monthly loan payments because you are paying only for the vehicle’s depreciation during the lease term, plus rent charges (like interest), taxes and fees.
You are responsible for any early termination charges if you end the lease early.
You may return the vehicle at lease-end, pay any end-of-lease costs and “walk away.”
The lessor has the risk of the future market value of the vehicle.
Most leases limit the number of miles you may drive (often 12,000-15,000 per year). You can negotiate a higher mileage limit and pay a higher monthly payment. You will likely have to pay charges for exceeding those limits if you return the vehicle.
Basic Things You Should Know About A Lease Purchase Contract
What exactly is a contract?
By definition, a contract is an agreement between two or more parties to do, or to refrain from doing, a particular thing in exchange for something valuable. The parties can be individuals, businesses, organizations and government agencies.
They key elements of a successful real estate contract:
1. Offer and acceptance
This implies original signatures with no alterations to the contract. Don’t mistake offer and acceptance for counter-offer. When the original offer is marked up and initialed by the party receiving it, then signed, you got a counter-offer and not offer and acceptance. When you come to a final agreement, you should rewrite the contract according to the agreement and this contract must be signed by both parties.
2. Consideration
Usually, money is the form of consideration people use, but sometimes, a promise to perform/pay is also good. .
3. Written contract
All real estate contracts must be in writing. In order to write a good real estate contract, you must keep in mind these things:
You must write the full name of the parties on the contract and thus identify the parties.
True Tenant Tales, Volume One
Working with tenants can be an amazing experience. (Owners and contractors are equally astounding, but those are subjects for another day.) It seems I get my most memorable anecdotes over the phone. Here are a few of the ones I’ve culled from my blog and experience and put together for your reading amazement.
First was a late-night phone call I took:
*beeeep*
*beeeep*
*beeeep*
“Hello?”
*beeeep*
*beeeep*
*beeeep*
“Hi, my smoke alarm keeps going off.”
*beeeep*
*beeeep*
*beeeep*
“Is there a fire?”
*beeeep*
*beeeep*
*beeeep*
“No. It does this every time I open the oven.”
*beeeep*
*beeeep*
*beeeep*
“Well have you cleaned the oven?”
*beeeep*
*beeeep*
*beeeep*
“I’ve opened the windows and door but it won’t stop.”
*beeeep*
*beeeep*
*beeeep*
“Why don’t you wave the smoke away with a magazine?”
*beeeep*
*beeeep*
*beeeep*
“Okay, I’ve got the fan in the kitchen now. What did you say about the oven?”
*beeeep*
*beeeep*
*beeeep*
“Have you cleaned it? There’s a product you can buy called EZ-Off. It’s, well, pretty easy to use.”
*beeeep*
*beeeep*
*beeeep*
“Really? Okay, I guess I’ll try that.”
Pricing Your Apartments
How do you fix a price point for an apartment? Take a guess? Figure it based on your carrying costs? Check comps and do a market analysis? Charge whatever the market will bear? If you’re looking to place quality tenants, less is sometimes more.
We all want to make money with income property; the more the better! When you’re looking for a new tenant, however, don’t assume that you’re going to make more money by charging more. If your property is priced high for what you’re offering, you won’t get a lot of calls, and the ones you do get will be either uneducated about your local rental market, desperate, unscrupulous, or a combination of any of these.
What to do? Perform your due diligence: check the advertisements for similar apartments, make appointments to look at them, talk to real estate agents and others in the business, and get a clear idea of how much others are getting ? not just charging ? for similar rentals. Then, advertise yours to undersell the competition.
Lease or Buy? That is Always the Question with Car Financing
Leasing is a perfectly viable and legitimate way to finance a new car. Although leasing offers attractive benefits, it is somewhat more complex than buying with a loan. This means there can be pitfalls if a decision to lease is made for the wrong reasons.
Therefore, a comparison of leasing versus buying is always a useful exercise when considering automobile financing. One option will generally be decidedly better than the other in any specific situation.
Let’s first look at the financial side of the analysis.
Leasing always results in lower monthly payments than a conventional automobile loan, assuming the same vehicle, same down payment, same interest rate, and same term. Lease payments will be as much as 60% less than loan payments. Therefore, if monthly payments are your most important consideration, leasing is a good financial option (although there may be other reasons you shouldn’t lease — see below).
However, in the long term, leasing actually costs more than buying assuming that the buyer keeps his/her vehicle for a long time after the loan has been paid. It doesn’t take rocket science to figure out that leasing a new car every two or three years costs more than buying one car and keeping it until it falls apart. So if long-term cost is your highest priority, then leasing is not for you.
Ten Ways to Save a Bundle on Your Next Lease
According to the Equipment Leasing Association ("ELA"), U.S. businesses lease every thing from laptop computers to commercial airplanes, racking up more than $ 200 billion in equipment leased each year. Although four out of five U.S. companies use leasing to acquire equipment, many don’t know the ins and outs of leasing well enough to negotiate a good deal. By focusing on a few key aspects of the lease transaction, you can save a bundle on your next lease and eliminate potential aggravation.
1. Choose the Right Leasing Partner
The starting point for saving money on your lease is to select the right leasing company. The biggest savings in this area come from saving time and dodging substandard lease transactions. The wrong lessor choice can result in a slow approval, inability of the lessor to deliver, hidden fees, a poorly designed lease transaction or worst. Give this aspect of obtaining a lease your highest priority. To save a bundle on your next lease, you must do your homework in pre-qualifying bidding leasing companies. Look for lessors with: 1) experience and knowledge; 2) good reputations; 3) the ability to perform; 4) helpful business contacts; and 6) a relationship approach. Ask for and get lessor financial information, background information on the key managers, a listing of recently completed leases, and contacts at key funding sources for each leasing company being considered. Review this information and follow up with all contacts provided.
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