| What is a Lease Charge? Depreciation represents the largest component of your lease payment. The second largest component is called the lease charge or rent charge. This is the cost of money, similar to interest on a loan. Remember, a lessor must purchase (or finance) the vehicle in order to lease it to you. Naturally, he or she will expect you to pay for the use of his funds (plus a profit) until you return the vehicle. As a result, the amount you would have financed had you purchased the vehicle will be subject to rent charges (interest) under a lease. Like an interest rate on a loan, the rent charge covers not only the lessor's profit, but also other costs of business |
|