Glossary of BMW Lease Terms

A BMW lease is a great way to get behind the wheel of the newest and most innovative BMW models. Learning the jargon that's often used when discussing leases is a good place to start, which is why the team at BMW of Fort Washington has put together a guide to some terms that might be unfamiliar to you.

Lease Agreement

Arguably, the best way to understand a lease agreement is to compare it to a financing contract. When you lease a vehicle, you're essentially entering into a long-term rental agreement at the end of which you will not own your leased car. 

By contrast, you'll borrow money from a willing lender when you sign a financing agreement. When you pay back the money you borrowed, you'll own the automobile you financed.

Term

The term is the length of time your lease contract will remain in force. The average term of a lease is 24 - 36 months, although some agreements might be longer or shorter in length.

Capital Cost Reduction

The capital cost reduction refers to things that reduce the amount you pay when you lease one of our new BMW vehicles. This typically accounts for your down payment, trade-in, and any BMW lease offers you qualify for.

Money Factor

Every BMW financing agreement includes an interest rate, which is the equivalent of the money factor in a lease contract. The money factor is normally expressed as a decimal. To calculate your money factor rate as a percentage, you should multiply it by 2,400.

Excessive Wear and Mileage

When you lease a vehicle from our Fort Washington, PA BMW dealership, your contract will include language that requires you to maintain your car in good condition and limit the number of miles you drive. If your vehicle experiences excessive wear and tear or you exceed the mileage cap, you may have to pay a penalty when your contract expires.

Start a BMW Lease in Fort Washington, PA

If you're interested in taking advantage of all of the benefits a lease has to offer, you can get started at BMW of Fort Washington today. Contact our dealership to discover what leases are currently available.