Annual Percentage Rate (APR)
A measure of the cost of credit expressed as a yearly rate. Each province requires various items to be included in addition to interest.
Base Monthly Payment
The portion of the monthly payment in a lease that includes depreciation, any amortized amounts and vehicle usage costs. Taxes, maintenance and any other fees are added to this base monthly payment to calculate the total monthly payment.
The person who signs the Conditional Sale Contract for vehicle purchase.
When you return your vehicle at lease maturity Mercedes-Benz Financial Services absorbs the loss if it is worth less than the established residual value. In other words, the residual risk is "closed" to you. You will remain responsible for any excess wear and tear charges, excess kilometre charges or other amounts that may be due and owing under the lease.
The formal request for credit. It usually includes your name, address, social insurance number (optional) and date of birth. By signing the application, you are giving Mercedes-Benz Financial Services authorization to check your credit history and to collect, use and disclose your personal information for the purposes set out in the credit application.
The amount of a vehicle's projected decline in value through normal use during the lease term.
An initial amount paid up front to reduce the amount financed. You can also reduce the amount financed when you trade a vehicle, depending upon the balance owing on the trade-in.
Excess Wear and Tear
The wear and tear to a vehicle that is above expected normal wear and tear. To help you determine if there is excess wear and tear on your leased vehicle that you will be charged for, Mercedes-Benz Financial Services has developed the First Class Finish. See your dealer for details.
If your leased vehicle is stolen, damaged beyond repair or destroyed, there may be a shortfall (gap) between the proceeds of your insurance that Mercedes-Benz Financial Services receives and the full balance owing by you under the lease. Rather than having to pay the whole amount of this shortfall, in circumstances where Gap Protection applies you will only be required to pay the amount of the insurance deductible together with any outstanding charges owing by you at the time Mercedes-Benz Financial Services receives the insurance proceeds. Gap Protection is not insurance and is only available through Mercedes-Benz Financial Services on certain leases.*
A person who is guaranteeing the payment and performance of your obligation under a lease or Conditional Sale Contract.
A contract for the use of a vehicle between a lessee and lessor, with agreed-upon terms and conditions.
The person or organization to whom the vehicle is leased; signatory to the lease agreement.
The organization that leases the vehicle (Mercedes-Benz Financial Services).
In an open-end lease, the lessee is responsible for the residual value. If you return your vehicle at lease maturity, you are responsible for any shortfall between the residual value and the net proceeds from the sale of the vehicle. In the event that the net proceeds exceed the residual value, this surplus would be paid to you (after deduction for any other amounts that may be owing by you under the lease).
At lease-end, you have options. One such option that may be available under your lease is to purchase the vehicle at a predetermined price plus applicable taxes. This predetermined price is listed in your agreement.
The estimated wholesale value of your vehicle at lease maturity, predetermined at the time you sign your lease.
The use of credit to finance the purchase of a vehicle over an agreed-upon duration, or term.
The use of credit to finance the purchase of a vehicle over an agreed-upon duration, or term with a final lump sum payment at the end of the loan allowing for lower monthly payments to be made during the term.
Security Deposit (Lease)
A refundable amount that the lessee must pay to the leasing company at the beginning of the lease. This deposit will be returned if all of the terms and conditions of the lease are met, otherwise it will be applied against your lease obligations.
The duration of the lease or loan agreement, typically expressed in months.