Car Leasing – Background

The car leasing is the most applied method to acquire a new or used vehicle. In Brazil, over the majority of the zero kilometer cars are sold by means of car leasing.

The car leasing has become extremely popular with the stabilization of economy in the mid 1990s, when inflation was curbed. That has instigated the market, because the banks began to have greater security that there will be no inflationary crisis, bringing losses to everyone.

Calculation of the Installments of the Car Leasing

The calculation of the car leasing installments is made, in the vast majority of cases, by using the "price" chart with a pre-established rate.

Car leasing with rates from 050% per month up to 2,50% per month can be found in the market, depending on the analysis of the customer most of the times.

In order to calculate the car leasing, use the following formula in Excel:

=PGTO( 2%; 24; 10000)

where 2% is the interest rate per month for the car leasing
24 is the number of installments of the car leasing
100000 is the financed value of the vehicle, which is R$ 10,000.00 in the example

In the calculation above, the value of the installment of the car leasing corresponds to 24 installments of R$ 528.71.

Credit Extension Rate for the Car Leasing

When making a car lease, a credit extension rate is charged. It is a fixed value that varies from bank to bank and from customer to customer.

Tip: refuse to pay that rate because all banks have procedures to exempt it. Usually half of the credit extension rate value goes back to the car dealer, an illegal operation called "return", which is very common in the car leasing market. Another "return" takes place when the rates negotiated are greater than the usual, the so-called "full chart". ALWAYS NEGOTIATE. And research the rates as well.

Legends Concerning the Car Leasing

• "Lease your car with zero rate": That is a lie. There is no such a thing. The value of the interest rates is embedded in the sales price.
• "Lease a percentage of your zero kilometer car with zero rate": Lie widely used by the large assembly industries. Once again, there is no car leasing with zero rate. The value is embedded in the price.
• "The Credit Extension Rate is mandatory in the car leasing": That is a lie. Refuse to pay it.
• "Our rate for car leasing does not change according to the financed value": That is a lie. The greater the financed value of the car, the greater the rate employed.
• "Pay easily within 84 months": Financing the vehicle in this manner you will end up paying for 2 cars...
• "We only take car leasing from XXX bank". Change car dealers. Right now!!

Tips to Lease a Car

I know I can sound a little repetitive, but these tips to make a car leasing are extremely important:

• Ask for Credit Extension Rate exemption - that always works for car leasing
• Research car leasing rates in several banks
• Do not pay for the car leasing in more than 24 months
• If someone is saying that the rate is zero, look for another car dealer of that brand and say that you do not want to lease the vehicle: you want to pay in cash. Then you will see that the price changes...
• Never fail to pay a car leasing installment