It seems that leasing is or will become increasingly popular as a way to acquire vehicles in China. Especially that leasing makes cars more affordable on a monthly payment basis.

Is any manufacturer offering leases on their vehicles at this time?

A brief overview of leasing:

Open End Lease: The Lessee (customer) is responsible for the residual value of the vehicle at the end of the lease.

Closed End Lease: The lessee is not responsible for the residual value, also known as a walk away lease, since the lessee simply walks away at the end of the lease.

Lease Term: The duration of the lease usually 36 months

MSRP: Manufacturer Suggested Retail Price

Capital Cost: The cost at which the lease starts, usually less than the MSRP.

Capital Cost Reduction: If the customer gives a downpayment against the capital cost its identified as a capital cost reduction.

Net Capital Cost: Is the capital cost minus the capital cost reduction (downpayment) its also the starting point of the lease.

Residual Value: An established value for the vehicle at the end of the lease, usually a percentage of the MSRP.

Depreciation: The difference between the net cap cost and the residual value.

Percent Interest: The interest charges to carry the residual value, and the depreciation for the duration of the lease.

Monthly Payment: Is comprised of the depreciation and interest charges.

If anyone provides an MSRP for a vehicle, the bank prime rate is, and what taxes are applicable to a vehicle purchase, its easy to work out an actual example.

leasing is so much better than financing if u have stable funds

Leasing is great for young established people who are just looking for a nice car that they are not planning to keep for long. It is much cheaper to lease a car, enjoy the luxury and get rid of it to lease another new car on your mind. However, I dont think this is feasible for a person married with a family who is looking for a car to keep for the longterm.

I agree with Michelle, thats exactly what i do!

Leasing makes vehicles more affordable, it lowers the initial barriers to acquire a vehicle. At the same time at the end of the lease term the lessee can either walk away or purchase or continue leasing the same vehicle.

If its a low priced vehicle leasing makes that vehicle affordable to a wider potential customer base as an example. Leasing is not a financial alternative for everyone, but in many instances it opens new possibilities for a wider customer base.

The financial institution leasing the vehicle will do a credit check on the prospective lessee, which is similar to financing.

Having no hands on knowledge of car prices in China, or what the interest rates are for automotive loans/lease. Here is an hypothetical example of a car lease.

To simplify it, lets make a few assumptions.

Lease Term: 36 months

Type of Lease: Closed End/Walk Away

Interest Rate: 9%

MSRP: 100,000 RMB

Capital Cost: 100,000 on the assumption there is no discount from the dealer.

Capital Cost Reduction: 10,000 this would be the down payment plus applicable taxes to lower the capital cost from 100,000 minus 10,000 down

Net Capital Cost: 90,000 this is the starting amount for the lease.

Residual Value: 50,000 the residual value is calculated as a percentage of the MSRP, in this example lets use 50% 100,000 x 50%= 50,000

Depreciation: 40,000 this is the net cap cost of 90,000 minus the residual of 50,000

Depreciation / Month: 1,111.11 the total depreciation 40,000 divided by the lease term 36 months

Money Factor: Interest rate of 9% divided by 24 which gives a money factor of 0.09 divided by 24 = 0.00375 this is the factor for the monthly interest

Amount to Caculate Monthly Interest: Net Cap Cost 90,000 plus Residual 50,000 for a total of 140,000.

Monthly Interest: 140,000 x 0.00375 = 525

Total Monthly Payment: 1,111.11 depreciation + 525 interest = 1,636.11 total plus whatever taxes are applicable

A lease calculator that can be useful...Click (http://216.138.253.232/Lease_Calculator/)