Leasing a car can be a great way to enjoy all of the new car benefits without having to deal with the high payments associated with new car ownership. At the end of the lease, you’ll have the option to buy the vehicle to own it outright. The amount owing will be determined by a number of factors, including the residual value.
Before you meet with a car dealer, it is vital that you arm yourself with a good knowledge of the basic details of leasing. Understanding the industry and business terms will put you in a better position for strong negotiations. One of the expressions you’ll hear quite frequently while discussing a car lease is “residual value”.
Residual value involves more than your monthly payments, and the buyout amount at the end of your lease. Leasing companies also use the vehicle’s residual value to establish any penalties owing should you break your lease early. It is an important word and you need to know precisely what it means, and how to estimate it. Read more . . .