Excess Wear Charge
Definition
- Most leases contain limits for wear and tear on the vehicle during the lease term. The lessee must pay charges for exceeding the limits when turning in the vehicle at the end of the lease.
Synonyms
damage, extra charge, tear, fray, excessive usage fee, weathered, deterioration, additional fee
Related Terms and Acronyms
- Closed-end Lease — Definition,
- The most common type of car lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
- Disposition Fee — Definition,
- A fee charged by some lessors at the end of a lease where the customer pays for the privilege of returning the vehicle.
- Lease (lse) — Abbreviation,
- A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
- Mileage Allowance — Definition,
- The number of miles, specified in a lease, that a car may be driven over the life of the lease.
- Open-end Lease — Definition,
- Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.
- Preparation Charges — Definition,
- An additional charge that dealers try to impose on buyers. It represents pure profit for the dealers, who have already been paid by the manufacturer for the cost of preparing the car for sale.
- Security Deposit (sec, sec dep) — Abbreviation,
- In automobile leases, sometimes called reconditioning reserve. An amount, often the same as one month's payment, the dealer holds to be sure that the car will be returned in good condition. It is to be returned, less fees and damage charges, at the end of the lease.
- Up-front Costs — Definition,
- The costs that must be paid at the time of signing a car lease agreement. These can include the first month's payment, a refundable security deposit, a capitalized cost reduction or down payment, taxes, registration and other fees.
- Valuable Papers Insurance — Definition,
- Insurance that covers damages to valuable papers such as property deeds or wills.
