Are you new to leasing or just want to learn more about the process? We help break down these common leasing terms so you'll gain a better understanding of the leasing process when you visit Parkside Kia. When you're ready, check our current Kia K5 lease deals, Kia Sorento lease deals and more at our new and used car dealership in Knoxville, TN.
Lease Terms & Definitions
Acquisition Fee: Fee that the creditor (also called the lending company or lessor) charges at the beginning of the lease term to cover administrative costs.
Adjusted Cap Cost: The "adjusted" capitalized cost of the vehicle includes any trade allowance, down payment, incentives, and rebates that may have been applied to reduce the capitalized cost.
Annual Percentage Rate (APR): The cost of credit for one year expressed as a percentage.
Capitalized (CAP) Cost: The negotiated price of the vehicle, plus any other items included in the lease and paid for over the life of the lease, such as a service contract.
Capitalized Cost Reductions: Any sum that reduces the capitalized cost such as a down payment, trade-in, factory-to-dealer or lender incentives.
Closed-End Lease: The most common type of lease, a closed-end lease permits the lessee to return the vehicle at the end of the lease term with no liability, provided all other terms of the lease are met.
Contract Maturity Date: The date when your lease contract ends and your vehicle must be turned in.
Disposition (Turn-In) Fee: A fixed fee, specified in the lease contract, payable at lease-end if the lessee does not purchase the vehicle. Kia Finance waives this fee with a Loyalty Reward if you lease or purchase another new Kia.
Down Payment: An initial amount paid to reduce the amount financed.
Excess Wear and Use: Everyday driving can result in wear and tear on a vehicle, like tire usage, exterior dents and dings or interior upholstery stains. A the end of a lease term, damage will be evaluated and there may be charges if it's considered excessive. Useful tools like our online Lease-end Self-Assessment help make the turn-in process easy so you can evaluate wear and use ahead of time.
GAP (Guaranteed Auto Protection) Coverage: If a leased vehicle is totaled or stolen, there may be a gap between the amount of the insurance settlement and the remaining lease obligations. Kia Finance GAP coverage waives the difference between what the car is worth and what you still owe. You pay only your deductible and are not liable for the remainder of your lease payments. Restrictions and limitations may apply.
Lease-End: When the terms and conditions of a lease agreement are fulfilled in full. Termination of a lease can be done early, buy may include a penalty.
Money Factor: The term money factor specifies a finance rate for a vehicle lease. It determines how much you'll pay in finance change each month during your lease. The higher the money factor, the higher your monthly payments and the more you'll pay in total finance charges.
Purchase Option: The option to purchase the leased vehicle, typically at the scheduled end of the lease term for a fixed price stated in the lease agreement.
Residual Value: Estimated value of the vehicle at the time the lease agreement expires which is predetermined at lease inception.
Single-Pay Lease: A lease where the lessee makes a single up-front payment instead of monthly installments. The residual value does not change, but the money factor is discounted, resulting in lower finance charges than with a traditional term lease.
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865-830-3455
865-830-3455