Balloon payments for business vehicle leasing?

Author	Message
Written on: 09.11.2009 [17:05]
Melzer Melzer Topic creator Posts: 6	What does the term balloon payment refer to with regards to business vehicle leasing?
Written on: 16.11.2009 [03:47]
Wilkins Wilkins Posts: 4	A balloon payment is a large, lump-sum payment that is usually scheduled at the end of a loan, lease or other stream of payments. This is probably one decision as to whether or not you will lease a car. Contracts for leasing a car can either be open end or closed ended. In an open end lease you could end up owing the company extra money depending on the value of the car when you return it……this is the balloon payment. For example if you had a 3 year open end lease, and it was estimated that the car would be worth £2000 after these 3 years but then it actually only ends up being worth £1200 then you owe the company a £800 balloon payment. The only thing is, that if you take a close end lease, then your monthly payments will probably be higher. There are of course other clauses to consider. Check your contract carefully before agreeing to the lease.
Also very interesting: Short term car leases vs. buying an old banger Why lease a car? Which of these is the best lease car? What are the main benefits of leasing a car? What happens if I break my car lease terms? Car lease vs. buying; which one is better? How do car lease specials work? What are the best car lease deals for personal car usage? Can my car lease company make me put up signs in my car? Are insurance premiums higher for a lease/hire car?