If you have never leased a vehicle before, you may think that you need to learn a different language in order to navigate the process. While financing terminology is still English, there are some terms that may sound foreign to you. Before you look for a Mercedes-Benz lease, you’ll want to become familiar with this glossary.
Term
The term is the length of your lease period. You can opt for a short-term lease that may only be a year or two, or perhaps as one as long as five years.
Money Factor
Speaking of interest, that’s what the money factor is. You’ll see that as a number with a lot of zeroes like this: 0.00020. To figure out what your actual monthly interest rate will be, just multiple that by 2,400.
Capitalized (Cap) Cost
This is the total price of the lease, which enables you to determine how much your payments will be every month.
Capitalized Cost Reduction
The cap cost reduction is anything – like a trade-in vehicle, for example – that lowers the cap cost.
Residual and Depreciation
Calculated ahead of time, the residual is the expected value of your car at the end of the lease. The depreciation – its loss in value – will factor into this calculation.
Gap Insurance
In most cases, gap insurance is included with a lease. This covers the vehicle in the event of it being stolen or totaled in an accident.
If you have any questions about leasing, just get in touch with Mercedes-Benz of Silver Spring. You can also come down to our dealership to see what’s in stock and to learn about our current lease offers.
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