A pre-paid auto lease is a new lease type that has found a place in the leasing market. With this prepaid lease, the consumer can forego the regular cycle of monthly payments of the lease, that is, if they pay a large amount of money at the start of the contract.
Actually, there are two types of amounts involved in the common auto lease that incur expenses and determine the lease payments every month. First of this amount is the depreciation charge. This accounts for the approximated value that the vehicle loses throughout the term of the lease.
Second type of amount is the residual cost, which is actually the value of the car that is projected at the termination of the contract. If you add up these two common charges, you come up with the lease payments you need to meet every month.
The concept behind the one payment pre-paid auto lease is to be able to remove the financial charges involved in deprecation. The consumer only accounts for the charges on residual value via a long pre paid payment at the start of the auto lease.
A single payment vehicle lease is invented with the budget conscious buyer in mind. With this type of lease, he does not have to worry about monthly payments. He can have a new vehicle every few years. What is more important is the no-interest purchase of car at the end of contract. For those who loathe having to deal with monthly payments and has a big ready cash for initial payment, then this type of lease is for you.