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Leasing 101 Virginia

When you lease, you are paying for the use of a vehicle.

Local Companies

Richmond Motor Co Inc
(804) 358-5521
4600 W Broad St
Richmond, VA
Dudley's Auto Sales
(540) 489-4732
3870 Old Forge Rd
Callaway, VA
Passport Nissan
(703) 751-4000
5990 Duke St
Alexandria, VA
Ford Ted Britt
(703) 591-8484
11165 Main St
Fairfax, VA
Keith's Auto Sales
(540) 526-2044
Penn Laird, VA
Madison Motor Sport
(434) 836-4656
1121 Piney Forest Rd
Danville, VA
Vinco
(703) 802-3480
12450 Fair Lakes Cir
Fairfax, VA
Sequoia Auto Mart Inc
(540) 288-2122
3321 Jefferson Davis Hwy
Stafford, VA
Roughton Pontiac-Subaru
(757) 461-1200
6241 E Virginia Beach Blvd
Norfolk, VA
Grubbs Chevrolet Inc
(540) 459-2125
21902 Old Valley Pike
Woodstock, VA

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2003 Porsche Boxster
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Understanding Leases

When you lease, you are paying for the use of a vehicle. Your payments cover the cost of the vehicle's depreciation over the time you drive it, rather than the purchase price. When the lease is up - typically in two to four years -- you must return the vehicle or purchase it outright. This article will explain what you need to know if you're considering a lease. Before you make your final financing decision, you should also review our articles on loans and the differences between loans and leases.

 

How lease payments are calculated

To calculate a lease payment, the financial institution (the "lessor") estimates the amount the vehicle will depreciate over the lease period, adds the interest being paid by the lessor to finance the car while you drive it and several other fees. Many leases can be started with 'no money down,' although a down payment ensures lower monthly payments.

The Federal Reserve Board recently enacted consumer-friendly legislation that requires dealers to disclose all the key variables of a lease: the interest rate, residual value, length of lease, and size of down payment.

 

The two- to three-year lease

Short term leases work for those who want a brand-new vehicle every few years. The manufacturer covers major maintenance costs for the duration, and you usually pay for required servicing. A major concern: if you terminate this type of lease early, you'll most likely pay severe penalties. Returning the car when the lease is up When a lease expires, you can either buy it, or return it. If you return it you must do the following:

  • Return the vehicle in its original state with no accessories, modifications, or different parts.
  • Make sure the vehicle is in good shape, with no excessive "wear and tear." There are penalties for damage or rough treatment.
  • Meet mileage limits, usually around 12,000 - 15,000 miles. You will be charged anywhere from 10 to 15 cents for every mile you drive over the limit, which can really add up. For example, if you drive 20,000 miles per year for three years on a 12,000 mile/15 cent lease, your penalty would be $3,650.
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