HOW DOES
AUTOMOBILE LEASING
REALLY WORK ?

WHEN YOU PURCHASE A VEHICLE
 AND FINANCE IT YOU PAY INTEREST
 AND 100% DEPRECIATION.
MEANING THE VEHICLE IS PAID IN
FULL AT THE END OF THE LOAN.

WHEN YOU LEASE A VEHICLE
YOU PAY INTEREST AND
ONLY PART OF THE DEPRECIATION.
MEANING THE VEHICLE STILL
HAS SUBSTANTIAL VALUE
AT THE END OF THE 3 YEARS.

THIS SUBSTANTIAL VALUE IS THE
“RESIDUAL VALUE” OR YOUR
PURCHASE OPTION AT LEASE END.

YOUR MONTHLY PAYMENT ON A
LEASE IS ALWAYS LOWER
BECAUSE YOU ARE ONLY PAYING
PART OF THE DEPRECIATION.

IF THE RESIDUAL VALUE IS
60% OF THE UPPER M.S.R.P.
THAN THE DEPRECIATION IS 40%

THIS MEANS YOUR PAYMENT
IS MUCH LOWER BECAUSE
YOU ARE ONLY PAYING
40% OF THE DEPRECIATION
INSTEAD OF 100% OF THE
DEPRECIATION.