Originally Posted by landho
Originally Posted by Rob M
i don't think so. leases don't use an APR, but instead what is called a "money factor". essentially, it's the same thing as an interest rate though... there will always be some money factor associated with a lease since the leasing company needs to profit somehow.
Take the money factor and multiply by 20 and you get the equivalent apr for comparison purposes.
The prepaid lease is only available thru Chrysler financial, and since you are not using their money, because you are make 1 large payment instead of 36, the money factor was zero. You are only paying for the depreciation. It is a way to make lease payments lower...but you have to write a large check on the first day. You also cannot take advantage of any lease pull ahead program in the future...since the prepayments cannot be refunded. You're right, other financial institution will not do one payment leases because they want to make money on the leases. Chrysler financial's goals are to help Chrysler sell autos...so they are willing to forgo earning interest. Just remember to make payments to yourself so that your bank account will built up again to lease a SRT next.
Doesn't the money factor also apply to the residual value? It's $20k of car sitting 39 months into the future. Doesn't the leasee have to pay for that?