Terms & definitions for leasing and financing
Learning the language of leasing and financing can seem like a daunting task. So we’ve made it as easy as possible. Here are some of the most commonly used terms along with their meanings. With a little effort, you’ll be talking like a leasing or financing pro.
Abnormal Wear And Tear. Is considered to be heavy damage; dents, cracked windows, interior burns, rips, etc. Should damage exceed the amount of the security deposit, you will be responsible for the difference. The terms and conditions are defined in your lease agreement.
Administration Fee. This is the amount a leasing company may charge for acquiring a vehicle and processing the paperwork on your behalf. We do not currently charge an administration fee.
Kilometre Allowance. This is the number of kilometres you are permitted to drive the vehicle during the course of your lease. Our standard lease program allows a maximum 24,000 km/year. An excess kilometre charge will apply should you drive the vehicle beyond the limits set out in your lease agreement.
Annual Lease Rate (ALR). Just like finance rates, leases also charge an annual interest rate. You’ll find your rate listed on your lease agreement.
Annual Percentage Rate (APR). Just like lease rates, financing also includes an annual interest rate. You’ll find your rate on your conditional sale agreement.
Assignment. You also have the option (with our approval) of assigning your lease to a third party. Look for the details in your lease agreement.
Depreciation. Is the estimated decline in the value of the vehicle over the lease term. It is calculated by taking the Net Lease Vehicle Amount less the Residual Value. This is the amount that is amortized over the term of the lease.
Early Termination. Our lease offers you the right to early termination. Your options are fully disclosed in your lease agreement. For more information, we recommend that you see your local Nissan Dealership.
Excess Kilometre Charges. This is the fee charged if you exceed the number of kilometres specified in your lease agreement. Payment of the excess kilometre charge is made to us when you return the vehicle.
GAP. We provide a Guaranteed Asset Protection plan to you at no extra cost. It works like this: should the vehicle be lost, stolen or damaged beyond repair, it covers the difference – after you pay the deductible – between the amount of the insurance settlement and any amount still remaining under the terms of your lease. As a result, you won’t be stuck for any additional payment. If you live in the province of Quebec, GAP insurance is not provided because you are already protected under the Quebec Consumer Protection Act. We do, however, provide GAP insurance to non-consumers in the province of Quebec.
Leased Vehicle Amount. This is the total cost of the vehicle. It includes any accessories, options, freight and PDE charges, and all federal or provincial surtaxes for items like air conditioning, fuel and tires if applicable.
Leased Vehicle Amount Adjustments. This is the amount of your down payment or the value of a vehicle you have traded in as the down payment portion of a standard lease agreement. The greater your down payment or the value of your trade-in, the lower your monthly lease payment can be.
Option To Purchase. At the maturity of your lease or at any time during it, you have the option of purchasing the vehicle. With a Nissan lease, the purchase price of the vehicle at the end of the lease is clearly stated in your lease agreement. Should you choose to purchase the vehicle prior to lease maturity, your obligations are outlined in your lease agreement. Please consult your local Nissan Dealership for additional information.
PAPP. This stands for Pre-Authorized Payment Plan, and it is part of all our lease and conditional sale agreements. In essence, it gives us authorization to automatically debit your bank account to cover the monthly payment of your lease or conditional sale agreement.
Pre-Paid Lease. Just as its name implies, you may choose to pay the entire amount of your lease upon delivery of the vehicle and enjoy your Nissan payment-free for the duration of the lease. Because we receive the full amount up front, you will also realize a savings.
Residual Value. The residual value is the estimated value of the vehicle at the end of its lease term. With all of our leases, we fully guarantee the residual value of the vehicle. The residual value amount is clearly stated in your lease agreement.
Security Deposit. Leasing a car is very much like renting an apartment. You are paying for the use of it and you are responsible for maintaining it in good condition. Just as a landlord seeks to protect himself or herself from any expenses which might arise from the neglect or misuse of the property by requesting a nominal security deposit, we do the same. Your security deposit also covers any excess kilometres or abnormal wear and tear. And in either instance, it can help alleviate an annoying additional expense at the end of your lease. Any unused portion of your security deposit, or the full amount, is refundable to you. Please note, interest is not paid on security deposits.
Total Lease Charges. These are the carrying costs you pay over the term of the lease and are similar to borrowing charges when financing. This amount, plus the monthly depreciation, makes up the monthly lease payment before taxes.