Auto Leasing Facts

• Advantages & Disadvantages of Leasing
• Buying vs. Leasing Comparison
• Auto Leasing Facts
• Options for Ending Your Lease
• Leasing Myths
• Lease Responsibilities
• Types of Auto Leases

Popularity Explosion

Leasing has grown more than tenfold in less than a decade. It accounts for more then 36% of the over 15 million vehicles sold in the United States each year. Why the dramatic upsurge in leasing?

The main causes are declining disposable savings amounts in America and changes to the tax laws. In 1987, more than 70% of disposable savings was available for the purchase of consumer goods. By 1993, that figure had declined to less than 40%. The percentage continues its downward slide. Additionally, the many tax deductions that favored purchasing over leasing were eliminated. Since those tax laws were changed, leasing has enjoyed a steady 2% to 3% increase per year for about the last ten years.

The bottom line: Leasing is an inexpensive way to finance a car.

How Auto Leasing Works

Leasing is a simple concept. Payments are low, because you pay only for the portion of the vehicle's value that you actually use, not the total value. Also, most leases require little or no down payment.

Initial Lease Costs

Security Deposit

A fully refundable security deposit is required to cover PROLEASE in the event you owe money at the end of the lease or fail to make payments as agreed during its term. It can also be used to cover past-due charges or payments, excess wear and tear, damage to the vehicle, excess mileage charges, or an end-of-lease payment. Of course, if you fulfill all the terms of your lease, PROLEASE will return the security deposit in its entirety.

First & Last Lease Payment in Advance

Some leases require the first and last payments at the beginning of the lease term. If you have a good credit rating, you may not be required to make the last payment until the end of the lease.

Capitalized Cost Reduction

You may have the opportunity to lower your monthly lease payment by making a one-time payment to reduce the car's initial capitalized cost (the total cost of the vehicle) including any fees, insurance, maintenance contracts or options you request. However, a large down payment will negate one of the primary reasons for leasing—little or no initial cash outlay. As an alternative, you can trade in your current vehicle to defray the capitalized cost reduction amount.

Sales Taxes, Titles & License Fees

In most states, when buying a car with a loan or cash, sales tax must be paid at the time of purchase. In other states, you are permitted to include taxes in the loan amount. By doing so, you will be paying interest on the taxes.

Some states permit leases to be taxed on each monthly payment rather than on the entire value of the vehicle. The rationale behind this is to tax you only as you consume the vehicle's value.

Tax, title and license fees are your responsibility, just as they are with a traditional loan. These fees can be paid up front, or included in the capitalized cost of the leased vehicle and amortized over the life of the lease.

Insurance

ProLease provides you with all insurance requirements when entering into a leasing contract. Insurance may be purchased through the agent of your choice.

GAP (Guaranteed Auto Protection) insurance may also be offered to you with a lease. Should you have an accident and the car is totaled, GAP insurance covers the difference between what is owed on the lease contract and the amount that the primary insurer will cover. This is most important in the early years of a lease, when the difference is greatest. GAP insurance is relatively inexpensive, considering the peace of mind it can provide.

Options for Ending Your Auto Lease

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Houston, Texas 77027
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Auto Lease Houston, Texas