Again, if the dealer refuses to give you this information, they shouldn't be trusted with any other free credit report credit card Shreveport part of the deal. Another dealer gave me a 7.2 money factor free credit report credit card Shreveport for the same model car. I thought money factors were expressed as very small numbers such as .00275 or .003. Dealers, in an ongoing effort to keep consumers confused, often quote the money factor in different ways: .003 money factor is often stated as 3% (I know, it doesn't make sense), which is really .003 x 2400 = 7.2% interest.
Then, they sometimes quote an interest rate like 7.2%, and call it money factor. Sometimes this is intentional confusion and sometimes it's free credit report credit card Shreveport just plain ignorance. Remember, dealer salespeople are not financial wizards and often don't understand leasing. What is the importance free credit report credit card Shreveport of the 2400 figure used in free credit report credit card Shreveport converting money factor to interest rate, and is it always 2400 regardless of the length of my lease?
To convert free credit report credit card Shreveport money factor to annual interest rate, multiply money factor by 2400.
To convert annual interest rate to money factor, divide interest rate by 2400. free credit report by law Yes, it's always 2400, regardless of the length of your lease. The 2400 is just a method of consolidating three other figures to simplify the lease payment formula. It is made up of the number 12 (divisor to convert annual interest to monthly interest), 2 (divisor to calculate the average amount financed), and 100 (free credit report credit card Shreveport divisor to convert a percentage to a free credit report credit card Shreveport decimal) 12 x 2 x 100 = 2400 (for more details, click here). In the lease payment formula, why does it look like I'm paying interest on Cap Cost PLUS Residual? The part of the formula that determines the finance portion of your monthly payment is (Cap Cost + Residual) x Money Factor. It looks like we're multiplying the sum of Cap Cost and Residual by interest rate, but Money Factor is not interest rate, although it can be converted to interest rate (see previous question above). free credit report instantly The reason Cap Cost and Residual are added is to facilitate the calculation of average amount financed: (Cap Cost + Residual) / 2 (the divisor 2 is part of Money Factor). It's used throughout the leasing industry and is perfectly legit. How is the lease acquisition fee and security deposit determined? These are fees established by the leasing company or bank, not the dealer. Money factor, disposition fees, and mileage fees are also set by the leasing company. You normally can't negotiate these fees with the dealer but you can shop around at other dealers, at your bank, your credit free credit report credit card Shreveport union for better terms. By the way, you typically won't see the free credit report credit card Shreveport acquisition fee (bank fee) specified anywhere in your contract but it's there hidden in your cap cost. Why don'free credit report credit card Shreveport t I get my down payment back at the end of the lease? You do not get your down payment back because it is an up-front prepayment of part of your capitalized cost — to help reduce your monthly payments.
Some people confuse down payment with security deposit, which is refundable to you at the end of your lease. Some leases require a security deposit, many do not. Does the lease company actually inspect my car each year for mileage? free credit report band contest
All this means is that you have 36,000 miles (3 times 12,000) as a total limit for the entire lease. It doesn't free credit report credit card Shreveport matter when you drive those miles., as long as you don't exceed the 36,000 mile total. Typical lease terms are set by lease companies at a minimum of 24 months. And because most of a vehicle's depreciation happens in the first year, a shorter free credit report credit card Shreveport new-car lease would be very expensive. A better solution is to assume (take over) an existing lease from someone who wants to get out and only has a year or few months remaining.
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