Lease 4 Less - Understanding Car Advertising

WHAT ARE
NORMAL LEASE INCEPTION COSTS ?

FIRST MONTHS LEASE PAYMENT

REFUNDABLE SECURITY DEPOSIT
(IF REQUIRED) USUALLY THE MONTHLY PAYMENT ROUNDED UP TO THE NEAREST $25 EXCEPT IN THE STATE OF NEW YORK WHICH HAS A $750 MAXIMUM.

DOWN PAYMENT
(AGREED BY THE CUSTOMER TO LOWER MONTHLY PAYMENT) NOTE: “DOWN PAYMENT” OR “MONEY DOWN” IS NOT THE SAME AS YOUR INCEPTION COSTS. IT IS PART OF YOUR INCEPTION COSTS!

MOTOR VEHICLE FEES
TITLE, REGISTRATION, PLATES, TIRE FEES,BATTERY FEES,ALL CHARGED BY THE STATE DIVISION OF MOTORS VEHICLES.

BANK FEE or AQUISTION FEE
CHARGED BY THE BANK OR LEASING COMPANY. TYPICALLY FROM $595 TO $895 DEPENDING ON THE BANK OR LEASE COMPANY. NOTE: SOME DEALERS PUT THE BANK FEE INTO THE CAPITALIZED COST (SELLING PRICE OF THE VEHICLE) TO REDUCE THE INITIAL OUT OF POCKET EXPENSE.

DOCUMENTARY FEE
A DEALERSHIP FEE CHARGED TO THE CONSUMER THAT IS “OPTIONAL”. HOWEVER MOST DEALERSHIPS DO NOT MAKE IT OPTIONAL. THE CHARGE IS FOR PROCESSING OF THE PAPERWORK TO EXECUTE THE SALE AND GOING TO THE MOTOR VEHICLE AGENCY. THIS CHARGE CAN RANGE FROM $70 to $499.
THE AVERAGE IS $125 to $199.

SALES TAX or USE TAX
USE TAX IS COLLECTED BY THE STATE AT THE TIME OF REGISTRATION. USE TAX IS CALCULATED ON THE PORTION OF DEPRECIATION ASSOCIATED WITH A LEASE. AS SUCH, THE AMOUNT OF USE TAX IS TYPICALLY ABOUT HALF OF THE AMOUNT OF SALES TAX WHICH IS ASSOCIATED WITH PURCHASING THE VEHICLE. CUSTOMERS OFTEN ELECT TO PUT THE TAXES INTO THE CAPITALIZED COST (SELLING PRICE OF THE VEHICLE) TO REDUCE THE INITIAL OUT OF POCKET EXPENSE.

EXAMPLE OF LEASE INCEPTION COSTS

$399.00

$400.00

$1500.00

$379.80

$12.50

$10.00

$795.00

$199.00

$1105.55

$4,800.85 =

FIRST MONTHS LEASE PAYMENT
REFUNDABLE SECURITY DEPOSIT
DOWN PAYMENT “ZERO DOWN” REFERS LINE#3
MOTOR VEHICLE FEES
TIRE FEE
BATTERY FEE
BANK FEE
DOCUMENTARY FEE
USE TAX (PAID UPFRONT)
TOTAL INCEPTION COST

PLEASE NOTE: YOU CAN PUT ANY OR ALL OF
THESE COSTS INTO THE CAPITALIZED COST
(PRICE OF THE VEHICLE) AND TAKE
LESS MONEY OUT OF YOUR POCKET OR
EVEN TAKE $0 ZERO OUT OF YOUR POCKET. HOWEVER, THE LESS YOU TAKE OUT OF
YOUR POCKET, THE MORE THE MONTHLY
LEASE PAYMENT WILL GO UP.