Automobile Lease

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Automobile Lease

A way to structure the purchase of an automobile. Rather than buying a car outright, the buyer rents the vehicle from the seller for a certain period of time, after which the buyer either returns the car or purchases it for a price agreed upon in the lease. Payments are usually lower on a lease than on a car loan, and it is easier to qualify. The buyer also bears no risk for the car's depreciation because he/she can simply return the automobile at the end of the term. The seller, on the other hand, is allowed to effectively sell the car at least twice: once new and once used. However, automobile leases generally are not considered good investments if a person wishes to use a car for a long period of time. It often also comes with more stringent terms, such as a limit on the number of miles one may drive in a year. See also: Capital Lease.
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These protections allow options such as the ability to reduce interest rates on home loans to a maximum of 6% and to terminate preservice home and automobile leases. In addition, it requires landlords to obtain court authorization before evicting servicemembers' families for nonpayment of rent.
For example, the new SCRA Guide addresses the SCRA's significant expansion of protections to servicemembers who need to terminate residential and automobile leases, (10) the SCRA's straightforward clarification of the application of the six percent interest rule to servicemember debts, (11) and the SCRA's extension of protections to National Guard Soldiers serving on active duty in Title 32 status for more than thirty consecutive days in response to a presidential declaration of national emergency.
The 2003 law also includes the termination of automobile leases entered into prior to active duty or while the service member is on active duty, if the member receives PCS orders to a location outside the continental United States or deployment orders for a period of 180 days or more (Alaska and Hawaii are included as OCONUS).
Similarly, household financial obligations, a broader measure that includes debt service as well as contractual payments for such things as automobile leases, rents, homeowners' insurance, and property taxes, is relatively high at nearly 18% of disposable income.
(14) Because of this shift, a measure of financial obligations that excludes automobile leases understates increases in consumers' required automobile finance payments.
Nonrecurring expenses exclude unnecessary expenses, such as country club dues, automobile leases for nonemployee family members and season tickets to sporting events.
(A precis of the article "Estimating the call option values embedded in closed-end automobile leases".)
The SCRA provides similar rights to servicemembers when they wish to terminate an automobile lease. Servicemembers are allowed to terminate their automobile leases when called to periods of active duty in excess of 180 days.
* Service members may terminate automobile leases upon receipt of PCS or deployment orders.
It allows servicemembers deploying to new duty stations to terminate automobile leases without having to pay early-termination penalties.
(13) A recent article provided an interesting list of the political expenditures recently made from political organization funds, including costs for Mardi Gras parties for every member of the Louisiana delegation, expensive automobile leases and the down payment on an office building for a "headquarters" for other Members of Congress; see Chen, "Congress' Big Fund-Raisers Get Down to Business--Literally," L.A.
It also failed to address automobile leases. Section 305 remedies these problems.

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