Sometimes this is intentional confusion and sometimes it's just plain ignorance.
Remember, dealer salespeople are not financial wizards and often don't understand leasing. What is the importance of the 2400 figure used in converting money factor to interest rate, and is it always 2400 regardless of the length of my lease? To convert money factor to annual interest rate, multiply money factor free online credit check North Carolina 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 free online credit check North Carolina average amount financed), and 100 (divisor to convert a percentage to a decimal) 12 x 2 x 100 = 2400 (for more details, click here). credit history report In the lease payment formula, why does it look like I'm paying interest on Cap Cost PLUS Residual?
The part of free online credit check North Carolina 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). The reason Cap Cost and Residual are added is to facilitate the calculation of average amount financed: (Cap Cost + Residual) / 2 (the divisor 2 is part of Money Factor). credit score ratings 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 bank, not the dealer. Money factor, disposition fees, and mileage fees are also set by the leasing company. You normally free online credit check North Carolina can't negotiate these fees with the dealer but you can shop around at other dealers, at free online credit check North Carolina your bank, your credit union for better terms. By free online credit check North Carolina the way, you 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 free online credit check North Carolina 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. view credit score
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.
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