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To convert money factor to annual interest rate, multiply money factor by 2400. To convert annual interest rate to money factor, divide interest rate by 2400. 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 canada credit report free Madison financed), and 100 (divisor to convert a percentage to a 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). credit report id theft

The canada credit report free Madison reason Cap Cost and Residual are added is to facilitate the calculation of average amount canada credit report free Madison 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 canada credit report free Madison 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 union for better terms. credit report score free By the way, you canada credit report free Madison typically won't see the acquisition fee (bank fee) specified anywhere in your contract but it's there hidden in your cap cost. Why don'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? 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 matter when you drive those miles., as long as you don't exceed the 36,canada credit report free Madison 000 mile total. Typical lease terms are set by lease companies at a minimum of 24 months. check credit score online

And because most of a vehicle's depreciation happens in the first year, a shorter new-car lease would be very expensive. A better solution is to assume (take over) an existing lease from someone who wants to get canada credit report free Madison out and only has a year or few months remaining.