MAPS™ vs. Leasing Worksheet:  A Guide To Help You Make An Informed Decision

Laws that regulate leasing don't require disclosure of all information related to leasing.  This results in what is referred to as "The Hidden Cost of Leasing".  Without this information on hand, it's hard to make an informed decision as to whether or not leasing is in your best interest.  if you're looking for a low monthly vehicle loan payment option, such as leasing provides, this worksheet will assist you in determining whether leasing or MAPS™ financing is for you.  There's no reason why a dealer or lease company cannot provide you with specific answers for each item below.  If they won't, we encourage you to find another dealer or lease company that will.
NOTE:  Once you review this information you may print it and use the worksheet to compare the specifics of your leasing and MAPS™ options. To print, click on your browser's print button.  Or, simply click here.  If you would like to view all of the explanation of terms used below, click here.

Sometimes the monthly payment of a lease will appear more attractive than the MAPS™ monthly payment. However, make sure you factor in the lease "up-front" money, the cost of the lease "excess wear and tear" clause, and the increased flexibility MAPS™ offers you at the end of the loan. Most often MAPS™ financing offers you a better overall deal.
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How MAPS™ offers you greater flexibility at the end of the loan.
When you lease, you don't build equity in a vehicle because the lease company owns it (Line 18) and your options are restricted. With a MAPS™ loan, you own the vehicle, it is titled in your name. Therefore, you have more options at the end of the loan. For example: The vehicle can be used as a trade for any vehicle at any dealership. A lease requires the vehicle be returned to the dealer from which it was leased. If the vehicle is worth more than the residual value at the end of the loan, you can sell the vehicle, pay off the residual value and keep the difference. With a lease you must return the vehicle to the dealer. You can elect to keep the vehicle and finance the residual value as a used vehicle loan. With a lease, if the dealer has inflated the residual value, this may not be possible without making an initial down payment.

Lines 1 & 2: Most leases are calculated on the MSRP (Manufacturer's Suggested Retail Price). In some States, it is permissible to calculate the lease on an amount that is higher than the MSRP. Therefore, it is important to know what the list price is and what you are paying for the vehicle. Keep in mind that with MAPS™ financing, you actually negotiate a purchase price for the vehicle just as you would for a conventional loan. If the MSRP were $22,000, you probably wouldn't buy it for $22,000. For example, if you negotiated a purchase price of $20,500 and financed for a three-year term, your savings would be $1,500 below the MSRP and your monthly payment approximately $42.00 less.

Line 4:  The residual value is the amount the vehicle is projected to be worth at the end of the loan. Dealers will often "play" with the residual value, sometimes increasing it to make the monthly payment lower or to compensate for having calculated the lease on a higher sell price. This results in an inflated future value. The vehicle will actually be worth less than the residual value at the end of the loan. If you elect to keep the vehicle, you'll pay an inflated price for it at lease-end. However, you may not be able to keep the vehicle and finance the residual value as a used vehicle loan because the amount you owe to "buy-out" the lease will be greater than the vehicle's loan value. You'll also forfeit use of the vehicle as a trade or selling for an amount greater than the "buy-out" price for a profit.

While you may not intend to keep the vehicle at the end of the lease, you never know what the future may hold. With this in mind, it's important to remember that MAPS™ offers a greater variety of available options at the end of the loan. This allows you to decide whether you want to keep or return the vehicle at the end of the loan, not up front, and without any risk or penalty regardless of what you elect to do. This is possible because under the MAPS™ program an industry standard is used to determine the residual value. You are never penalized with a higher residual value than what is published.

Line 6:  You may be told that leases are not calculated based on an interest rate, rather a "money factor." In fact, the "money factor" is based on an interest rate. So, there is no reason you should not be advised of the interest rate.

Line 9:  If the lease you are considering has a capitalization cost, you may want to consider another dealer or vehicle that does not have such an item as part of the lease. Or, make sure you clearly understand what the capitalization cost covers. Often it is misconstrued as a down payment. If such is the case, then the capitalization cost amount should reduce the MSRP and it really should be advertised as a "down payment." However, sometimes the capitalization cost is simply a fee charged by the dealer. Or, sometimes a portion of the capitalization cost is actually a down payment with the balance being a fee charged by the dealer.

Line 15:  Most every lease has an "EXCESS WEAR AND TEAR" clause. The problem is they do not define "excess." Basically this means it's at the lease company’s or dealer’s discretion to define "excess" when you return the vehicle. If the lease you are considering has an "excess wear and tear" clause, have it clearly defined and put it in writing. If they are not willing to do this, you are at risk to pay hundreds if not thousands of dollars should you elect to return the vehicle. Another option would be to have the lease company or dealer give you a list of customer references that have returned vehicles for which there was excess wear and tear. Then, call the references to identify how "excess" was determined.

Keep in mind The MAPS™ program DOES NOT HAVE AN "EXCESS WEAR AND TEAR" CLAUSE. Your only obligations with MAPS™ financing, if you elect to return the vehicle, are to make sure original equipment is intact when you return it, any physical damage to the vehicle that would be covered by your private auto insurance coverage, is repaired, and the excess mileage cost is satisfied.

Line 18:  When you lease a vehicle you are really “renting” it, even though you are totally responsible for maintenance and repair. With MAPS™, you own the vehicle – it's titled in your name. Thus, you build equity. If the vehicle is worth more than the residual value at the end of the loan, you can sell it and pocket the difference between the residual value and what you sold it for or capitalize on the higher value and use it as a trade. You don't have these options with a lease because the vehicle's title is held by the lease company, meaning they own it! The dealer may tell you that you can "buy-out" the lease and exercise these options, but if you do, you will have to pay sales tax and other title/registration fees based on state sales tax and vehicle registration laws.

Line 19:  Depending on state sales tax laws, when you purchase a vehicle the sales tax is added to the purchase price, and when you lease a vehicle the sales tax is added to the monthly payment. For example, in Pennsylvania, the sales tax on a purchased vehicle is 6% of the purchase price, however, when a vehicle is leased, 9% sales tax is added to the monthly lease payment. Some lease companies or dealers "forget" to include sales tax as part of the quoted monthly lease payment. Therefore, an important question to ask is if the monthly lease payment quoted to you includes any applicable state sales tax.

With MAPS™ financing, because you purchase and own the vehicle, any State sales tax laws would apply as they relate to "purchases." In some cases, you can include the cost of sales tax as part of your financing.

Lines 20 & 21:  Most members are not aware a lease company requires a higher amount of minimum personal auto insurance coverage than what you normally might carry. They require this because they own the vehicle and want to be protected. Unfortunately, they don't pay for it - you do! Make sure you find out what the minimum auto insurance coverage is for the lease. Then, call your insurance agent to calculate how much your annual auto insurance policy premium will increase. This could easily add up to $25.00 to $40.00 per month!

With the MAPS™ program, there is no minimum coverage required. You can continue to carry the same level of auto insurance you now carry – it's your choice.