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Automotive finance calculator8/11/2023 It is expected that leased vehicles are returned to lessors in reasonable condition at the end of the lease period. Lessees that go over their mileage limits have the option to avoid the penalties by buying the vehicle at the end of the lease. Keep in mind that the average American drives around 18,000 miles a year. Although the monthly lease payments for high mileage leases tend to cost more than the standard leases, they may be helpful to those who are prone to racking up a ton of miles. There exist certain car leases called "high mileage leases," which give lessees several thousand additional miles to work with annually. In the U.S., the average cost is between 5 to 20 cents per mile over. If the lessee exceeds this limit, there will be a penalty charge per mile over the limit when the lease ends. In the U.S., standard auto leases generally allow annual mileage limits of 10,000 to 15,000, with most coming in at 12,000. Most leases will have a mileage cap, which is the maximum number of miles the car can be driven during the life of the lease. Therefore, auto leases tend to be more affordable for slowly-depreciating vehicles because they hold their residual values well. The difference between the price of the car minus residual value will result in the depreciation of the car after a lease, which is amortized throughout the lease loan. It is an estimation of the worth of the car at the end of the lease period. Financial institutions that issue lease contracts, not the dealers, set residual values on vehicles. In essence, the residual value of a car is the amount it can be bought for at the end of the lease.
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