Fequently Asked Leasing Questions ...

Did you know that 93% of all Titus-Will lease customers are so satisfied with leasing that they become lease customers fo.

Q? How is a payment figured?

A! This is a little tricky if you’re used to financing, and a big reason why people avoid leasing (we tend to avoid what we don’t understand, right?). So here’s how it works…

After a price (capitalized cost) is determined, the bank will calculate the residual value, the amount for which a bank predicts a vehicle will sell at the end of a lease. The residual amount is usually around 60% of the capitalized cost. The difference between the capitalized cost and the residual is called the depreciation. The majority of your monthly payment is the depreciation divided by the number of months you are leasing. The second component to a least payment is lease charge. This is determined by adding the residual to the capitalized cost and dividing it by the money factor, a figure quoted by the bank. The monthly depreciation plus the monthly lease charge is your monthly lease payment. An example of a 36 month lease with no money down and a .003% money factor is below:

Capitalized Cost $24,000
Residual @ 60% - 14,400
Total Depreciation $ 9,600 / 36 Months = $266.66 Monthly Depreciation

Capitalized Cost $24,000
Residual @ 60% +14,400
Total Depreciation $38,400 x .003 = $115.20 Monthly Lease Charges

Monthly Depreciation $266.66
Monthly Lease Charges $115.20
Basic Lease Payment $381.86

For comparisons sake, the same vehicle would have a finance payment of $729 per month for 36 months at a 5.9% rate. A 0.0% rate would still be a lot higher than a lease: $667.

Q? What if I drive too many miles?

A! This is a common concern and you’ll be happy to know that there is little to worry about. A typical lease allows for 15,000 miles per year (41 miles per day, every day of the year—more than most people drive), but many banks offer additional mileage options. If you exceed the mileage you sign up for, you are charged 15 cents per mile at the end of the lease. However, when you trade in a vehicle that you financed (or paid cash for) you will be penalized 25-35 cents per mile over 15,000 per year when the value is calculated. So 15 cents, in fact, is a better deal when you drive a lot of miles.

Q? What if I want to break the lease early?

A! Like a loan, this is very flexible. The payoff is the difference between the initial value.

Q? Will I qualify for a lease?

A! For the most part, anyone who qualifies for financing will automatically qualify for a two or three year lease. In some cases, someone with a lower credit score will qualify for a lower rate than they would with financing.

Q? What if I want OWN my vehicle?

A! When you finance, you don’t actually own anything—the bank owns your vehicle until you pay it off. Since 83% of financed vehicles are traded in before the balance is paid to zero, these customers NEVER own their vehicle. If you don’t plan on ever owning your vehicle, then leasing is a great option—and you’ll never have to worry about negative equity.

Q? What if I want equity in my vehicle?

A! That’s the beauty of leasing! Leasing is designed NOT to give you equity in a vehicle. You pay only for the part of the car you use instead of for the whole car, and that saves you cash. Compare a three-year lease with a three-year finance contract. The lease payment will be 40 to 50 percent lower, which means that leasing can save you $200 to $300 per month in payments. True, you won’t have equity in the vehicle, but you will have potentially huge cash savings. And most people can use cash-in-hand to cover other expenses, right?

Q? What's in it for Titus-Will?

A! Since 93% of our leasing customers return for another lease, that means they must be pretty happy, right? Happy customers refer their friends and family and that’s good for business.

Q? Why don't more people lease?

A!Most stores don’t present it to consumers as an option. This is usually because they aren’t educated enough on the subject to explain it themselves. So consequently the general public isn’t educated on it—we tend to avoid what we don’t understand.

Q? When shouldn't I lease?

A!First, if you’re planning on relocating overseas in the next 12 months, you’ll need to show proof of ownership to ship a vehicle. You don’t own a leased vehicle, so you would have to terminate the lease early, buy the vehicle, and possibly finance it. It would be a bigger hassle than it’s worth.

Second, anyone with unlimited cash and no particular economic use for it might not benefit from leasing. In these cases, it’s usually easier to write a check for the whole vehicle and have it over with. That said, a lot of wealthy people lease their vehicles because they see the value in doing so.

Q? Is there a catch?

A!No catch. This is just an option with many advantages. If you like it, great. If not, we’re happy to help you finance your vehicle.