Leasing Terms Explained - Part 6
Subvented (Subsidized) Lease
A subvented lease is a special lease offered by manufacturers with special
incentives to make it more attractive. These special incentives often take the
form of a lower base interest rate, higher residual values, and manufacturer
discounts.
In many cases, a subvented lease will have a lower net interest rate
than other leases. Subvented leases are usually available for a limited time and
the terms are not negotiable. Any negotiated change in the terms will result in
a different net interest rate.
Target Purchase Price
This is the price that you can reasonably expect to negotiate for the vehicle as
configured; however, it is not necessarily the lowest price. It includes an
average acceptable markup for the dealer and reflects recent market conditions.
Total Out of Pocket Cost
This is the total of all monthly payments, any lease fees and deposits, and any
capital cost reduction (except tax, license, and registration) from lease
inception to closure.
Wear and Tear
It's your responsibility to keep the car in good condition. Return the car with
a dented fender, bald tires, or a ruined engine because of lack of routine
maintenance and you'll be charged for the repairs. Some wear and tear is
allowed, of course. But if you aren't inclined to take reasonable car of your
car, then a leased car may not be for you.
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Leasing Terms - Part 5