Capitalizing Cost Reduction - Down payment and/or trade-in rebate, if applicable.
Lessee - User of the leased property.
Lessor - Owner of the leased property.
Depreciation - Estimated decline in the value of a leased asset.
Off-Lease - When a lease is terminated, the equipment that was being leased is referred to as being this.
Open-End Lease - Lessor assumes the risk for actual depreciation and establishes a fixed purchase price.
Gross Capitalized Cost - The starting balance of the lease or the vehicle's original value plus administration fee and capitalized add-ons.
Rent Charges - Funds charged to cover the lease company's cost of funds, operating expenses and profit.
Residual Value - end of term estimated value established at beginning of lease and used in calculating base monthly payment.
Security Deposit - Refundable amount used to provide a measure of protection against non-compliance with the contract requirements.
Administration - Covers administration cost, and together with rent charges, is part of the compensation to the lease company for administering the lease.
GAP Protection - Protection included in Smartlease, but must not be in other leasing contracts. Covers the difference between the market value and the payoff when the vehicle is declared a totoal loss (destroyed, or stolen and not recovered), this covers the early termination charge minus the insurance deductible, not including past due payments and other accrued charges.
Disposition Fee - Money to be used to dispose of vehicle after lease.