FAQ: What is the definition of a Car Lease (Finance Lease), and how do they work?
What is the definition of a Car Lease (Finance Lease), and how do they work?
A Finance Lease or Car Lease is a commercial finance product.
Under a Car Lease, the financier purchases a car on behalf of the customer, and then leases the vehicle to the customer in return for monthly rental payments.
At the end of the term (length) of the lease, the financier gives the customer the option to purchase the vehicle in return for a final installment (residual value).
Alternatively, the customer may choose to "trade in" the vehicle, or re-finance the residual and continue the lease.