How Car leasing works

The concept of car leasing is basically you paying for the depreciation of the car during the period you were driving it. Depreciation is the difference of between a vehicle's original value and it's value at the end of the lease. Different makes and models of vehicles have different depreciation rates. Vehicles having the lowest depreciation rates usually have the best lease deals.

Capitalized Cost is the price agreed upon by you and the dealer, this is also known as the lease price. The  capitalized cost may include certain fees, such as an acquisition fee

The Residual Value of the car is its depreciated value after the end of the lease term.The higher the residual value the lower is your lease payments.

Money Factor is the interest you pay to the lease company for the money they spent to buy the car from the dealer so that they could lease it to you. Money factor is sometimes called lease factor, lease rate, or simply factor.

Lease term is the length of time a car is leased, which is usually expressed in number of months. A good way to maximize your lease is to choose a l lease term that's not longer than the coverage warranty that comes with your vehicle. In that way you're covered for the entire duration of the lease.