Below are some of the most frequently asked questions regarding auto leasing and our auto consulting service. They may help familiarize you with a process that can be somewhat confusing. Feel free to consult this page before contacting us, as the answers to your questions may appear here. For all other inquiries please contact us.
What is the difference between a closed-end lease and an open-end lease?
In a closed-end lease, you are responsible for making a specified number of lease payments over a period of time based on a fixed end-of-lease value (residual value) regardless of market conditions at the time of lease termination. If there is a loss of value from depreciation, other than from excess wear and tear or mileage, it is absorbed by the leasing company. In an open-end lease, you take the risk and are responsible for any difference from the estimated residual value once the vehicle is returned and resold. Hollywood Motors Consulting only provides closed-end leases to its customers.
What are the advantages and disadvantages of leasing?
The advantages of leasing are lower monthly payments, more vehicle for less money, little or no cash outlay, preservation of capital, less sales tax based on the monthly payment, not the purchase price, and possible tax benefits. The disadvantages are no equity or ownership in the vehicle, potential expense from early termination, and the possibility of lease end charges such as excess wear and tear or mileage.
–Buy or lease – Savings account or no savings account
Buying a car with a loan is essentially like putting money into a declining-value savings account — you never get out as much as you put in. A portion of every payment you make is lost to depreciation. What you have “to show” for your investment when your loan is paid off is only the part that is left over after depreciation. A terrible investment by any measure.
Auto leasing, then, is similar to buying, but without the “savings account.” You only pay for what you use. It’s true that you’ll own nothing at the end of a lease; you have nothing “to show” for the money you’ve put into it. But… what you don’t own is the same part of the car — the depreciated part — that a buyer too doesn’t own at the end of his loan.
With auto leasing, you at least have the option of putting your monthly payment savings into more productive investments, such as mutual funds or stocks that have the possibility of increasing in value. In fact, many experts encourage this practice as one of the benefits of leasing, though most people will typically find other uses for the money they save by auto leasing — such as paying the rent or buying groceries.
Does Hollywood Motors Consulting only lease high-end luxury cars?
We can assist you with a lease on virtually any type of vehicle. Since there are exceptions, we encourage all who visit our site to request a complimentary lease quote showing the most competitive lease programs for their desired vehicle.
How long does the Hollywood Motors Consulting process usually take?
We can usually have you in your new car in as little as 24 hours from lease approval, provided your desired vehicle is readily available at a dealer in your area. If the car that you specify is located out of town or it must be ordered and delivery time will vary. Consult a Hollywood Motors Consulting client advisor for the availability of your specific vehicle.
Why wouldn’t I choose the lease plan with the lowest monthly payment from your lease comparison?
Typically, the lease plan with the lowest monthly payment is the logical choice. However, if you plan to purchase your vehicle at the lease end, a program with a lower residual value or buyout and a payment that is palatable could be the right choice for you. This might be a program that is ranked near the top of the list.
How do you arrange for the delivery of my new car?
Generally, delivery of your new car is arranged through a dealership in your area. We provide you with all the pertinent documentation prior to delivery to confirm your lease transaction and eliminate stress and surprises. If in order to fill your request we must obtain your desired vehicle from a dealer out of your area, your car may be delivered directly to your door. The cost of transportation will vary by geographic location and will be included in your lease.
What happens if I decide to terminate my lease early?
Terminating your lease before its expiration can be a costly proposition. Technically you are responsible for all remaining lease payments. In order for you to get out of your lease cleanly, you would need to find either a dealer or an individual willing to buy your vehicle for the payoff amount at your intended time of termination. In most cases, the residual value in your lease will produce a close-out amount that is higher than market value and any negative equity would have to be absorbed by you. It is recommended that before you decide to enter into a vehicle lease, you make certain that you are comfortable with the lease term. You should pursue the shortest term within your budget.
What is the disposition fee and when is it collected?
Some leases contain a disposition fee charged by the financial institution to cover the cost of retrieving your vehicle at the lease end. The amount, which varies by leasing institution, is fully disclosed in the lease contract. You will be billed for this charge after you turn in your vehicle.
What is considered excessive wear and tear?
Most leasing companies will allow for a few small door dings, scratches, stone chips, and interior wear that typically occurs over a three-year period. However, a cracked windshield, bald tires, dents, and body damage that is not professionally repaired will be charged back to you after you turn in your vehicle. It is recommended that you take care of such damage before turning in your vehicle. The cost of such repairs will most likely be less than what you will be charged by the leasing company.