How much can I afford?
much should you spend on a new car? Not more than 20 percent of monthly
income, say experts. To calculate monthly payments, you should factor
in proposed purchase price, the down payment, interest rate and term of
your loan. Check out our Finance Calculator link to calculate your
monthly payment or the purchase price you can afford.
How much should my down payment be?
new car loses a significant amount of its value when you drive it off
the lot. That's where the down payment -- the amount of cash you bring
to the purchase -- comes in. You should plan on putting down at least 20
percent of the purchase price. With that much down, a buyer should
begin to see positive equity about two years into a four-year loan,
assuming the vehicle's kept in good shape. If you can't put down 20
percent, scrape up as much cash as you can and keep the term of the loan
as short as possible.
After I select my vehicle, what steps do I take to lease or finance it with Dewey Ford?
you select a vehicle you can apply for leasing or financing online or
at the dealership. To apply online, click on our Credit Application tab.
What happens if my new vehicle hasn't arrived yet when my current lease is ending?
may have the option of extending your lease for a month until your
vehicle arrives. All you need to do is contact a Lease End
representative to discuss your options.
What happens if I terminate my lease early?
on the terms of your lease agreement, you may have various options
available to end the lease early. Please note you may have to pay a
substantial charge to end the lease early.
How do I go about purchasing my vehicle at the end of my lease?
vehicle may be purchased at the end of your term by contacting a Lease
End representative. Once requested, we can generate a payoff quote and
fax or mail it to you. When we receive a certified check for the payoff
amount, we can release the title.
charge included in most lease transactions that is either paid upfront
or is included in the total cost of the vehicle. This fee usually covers
a variety of administrative costs such as the costs of obtaining a
credit report, verifying insurance coverage, checking the accuracy and
completeness of the lease documentation, and entering the lease in data
and accounting systems.
Adjusted Capitalized Cost
amount capitalized at the beginning of the lease, equal to the gross
capitalized cost minus the capitalized cost reduction. This amount is
sometimes referred to as the net cap cost.
annualized cost of credit expressed as a percentage in a finance
agreement. In a lease, there is no annual percentage rate or equivalent
loan that is amortized only down to the expected end-of-term value,with
a remaining balance to be paid in a lump sum at the end of the term.
Estimated final payment that covers the remaining expected value of the vehicle.
Base Monthly Payment
portion of the monthly payment that covers depreciation, any amortized
amounts, and rent charges. It is calculated by adding the amount of
depreciation, any other amortized amounts, and rent charges and dividing
the sales/use taxes. Other monthly fees are added to this base monthly
payment to determine the total monthly payment.
called "cap cost." The dollar figure that the lease is based on. It
includes the price of the car plus selected options. Other costs such as
title, license and documentation fees can sometimes be added in.
Capitalized Cost Reduction (Cap Cost Reduction)
sum of any down payment, net trade-in allowance, and rebate used to
reduce the gross capitalized cost. The cap cost reduction is subtracted
from the gross cap cost to get the adjusted cap cost.
Closed-end Lease (Walk-Away Lease)
is a lease in which you are not responsible for the difference if the
actual value of the vehicle at the scheduled end of the lease is less
than the residual value. You may, however, be responsible for excess
wear and excess mileage charges if they apply.
amount charged to cover the vehicle's projected decline in value
through normal use during the lease term as well as other items that are
paid for over the lease term. It is calculated as the difference
between the adjusted capitalized cost and vehicle's residual value. This
amount is a major part of your base monthly payment.
initial cash payment in a lease that reduces the capitalized cost or is
applied to other amounts due at lease signing. See Capitalized Cost
If you are financing, most retail transactions involve a
down payment of 10 to 15 percent of the amount to be financed. However,
it can be less, depending on your credit standing, ability to repay and
other criteria. A down payment helps lower your monthly payment, as well
as establish equity in your vehicle.
of the lease before the scheduled termination date for any reason. The
reason may be voluntary or involuntary (for example, the vehicle is
returned early, stolen, or totaled, or you default on the lease). In
most cases of early termination, you must pay an early termination fee.
Excess Mileage Charge
A charge by the lessor for miles driven in excess of the maximum specified in the lease agreement.
Excess Wear and Use
charged by a lessor to cover wear and use on a leased vehicle beyond
what is considered "normal." The charge may cover both interior and
exterior damage, such as upholstery stains, body dents and scrapes, and
tire wear beyond the limits stated in the lease agreement. The lessee
must either repair the excess wear and use or pay the lessor the
estimated cost of repairs.
plan that provides you financial protection in case your lease vehicle
is stolen or totaled in an accident. If the vehicle is stolen or
totaled, the lessor will cover the difference between the early
termination payoff and the amount for which the vehicle is insured. You
will still be responsible for any past due amounts you may owe on your
lease, a disposition fee, your insurance deductible, and any other
policy deductions by your insurance company.
Gross Capitalized Cost (Gross Cap Cost)
agreed-upon value of the vehicle, which generally may be negotiated;
plus any items you agree to pay for over the lease term such as taxes,
fees, service contracts, insurance, and any prior credit or lease
contract between a lessor and a lessee for the use of a vehicle,
subject to stated terms and limitations, for a specified period and at a
The period of time for which a lease agreement is written.
party to whom the vehicle is leased. In a consumer lease, the lessee is
you, the customer. The lessee is required to make payments and to meet
other obligations specified in the lease agreement.
The person or organization who regularly leases, offers to lease, or arranges for the lease of the vehicle.
Manufacturer's Suggested Retail Price (MSRP)
Sometimes called "sticker price," the MSRP is set by car manufacturers and, by law, must be posted on a window sticker.
right to buy the vehicle you have leased before or at the end of the
lease term, according to terms specified in the lease agreement. A lease
agreement may or may not include a purchase option.
Purchase Option Price
option in a lease that allows the lessee to purchase the vehicle at the
end of the lease term for a specific price, and in some cases, during
the lease term at an amount to be determined or at a specified price.
Refundable Security Deposit
amount collected by the lessor at the beginning of the lease to ensure
the lessee's compliance with the terms of the lease. The security
deposit is generally refundable at lease end, provided there are no
excess mileage or excess wear and use charges, outstanding parking
tickets or unpaid lease payments. A few states do not allow security
deposits but do allow a reconditioning reserve. The reconditioning
reserve can only be used to repair the vehicle and cannot be used for
past-due payments, late charges, parking tickets, etc.
end of term value of the vehicle established at the beginning of the
lease and used in calculating your base monthly payment. The residual
value is deducted from the adjusted capitalized cost to determine the
depreciation and any amortized amounts. It is an estimate that may be
determined in part by using residual value guidebooks. The residual
value may be higher or lower than the realized value at the scheduled
end of the lease.
The duration of the term of the retail contract, usually expressed in months (e.g., 24 months, 36 months).
The scheduled termination is the end of the lease term as called for in the lease.
Legal document that identifies the owner of the vehicle. The lessor, not you, holds the title to the leased vehicle.