Leasing a vehicle?

Sorry... had to get ready for work .

So a lease is nothing more than a short term loan with a balloon payment at the end. The residual is the balloon ... you can either pay the "balloon" and keep the car or give the car back so the lender can sell it and keep the proceeds.

Money factors. A money factor is an interest rate % converted into a decimal point factor . Such as 6% = .0025
The reason for this is that on a lease you are not paying the loan down to zero... you are paying it down to the residual . So your average daily balance is higher .....This is why knowing the money factor is so important . If the loan % and the lease money factor are the same you will be paying more dollars in interest on the lease . Which is ok if the other advantages of the lease out weigh the extra interest paid . But if the money factor is 3% higher than the optional loan rate do not lease ! Because you will end up paying way more in interest .

Have to go to work now. I will post more later.