What Auto Finance Terms Mean

You never want to spend a lot of money – or prepare to spend a lot of money – without fully understanding what you’re getting into. If you’re thinking about leasing a new or pre-owned Jeep® model, it is a smart idea to familiarize yourself with the terms you will encounter during the Jeep lease. Here Zeigler Chrysler Dodge Jeep RAM goes over what you need to know.

Term

The term is the length of the lease. This can vary pretty widely, and they generally start at 24 months. Then they go up in 12-month increments typically stopping at 60.

Money Factor

When you pay for something over time, in most cases it will come with an interest payment. With leasing, this is called the money factor, and it will look like this: 0.00025. Multiplying this by 2,400 will let you figure out what the interest will be. In this instance, it would be six percent.

Capitalized Cost

Also referred to as the cap cost, this is the total amount of money you agree to pay to lease your new Jeep vehicle.

Capitalized Cost Reduction

Anything used to trim the cap cost is the capitalized cost reduction. This could include deals or discounts or the value your trade-in car offers.

Residual and Depreciation

The residual value of your Jeep vehicle is its value at the end of the lease, and this will be calculated before your lease begins. The depreciation is the loss in your car’s value.

Gap Insurance

Gap insurance is a financial safeguard for both you and the leasing company. If in the event that your pre-owned Jeep model is stolen or totaled in an accident, it will cover any remaining difference between what it is worth and how much your insurance will give you.

Zeigler Aims to Make Leasing Simple

Leasing can be a little confusing, but our Jeep dealership will help simplify it for you. Get in touch with us to learn more about the process. Or, just come down and see us in Schaumburg, IL to speak to someone in person and to check out all of the Jeep models in stock.