Effective Monthly Payment - The effective monthly payment is your true monthly cost (before sales tax) for assuming a lease. With a seller cash incentive serving to help subsidize the lease, your effective payment is less than the actual monthly payment.
The Effective Monthly Payment is calculated as:
Base Monthly Payment - (Cash Incentive / Months Remaining) = Effective Monthly Payment
For example, a $300.00 monthly payment - ($300 incentive / 10 months remaining) = $270 Effective Monthly Payment
Note: The lease buyer will be responsible for the base monthly payment after the transfer plus any sales/use tax (if applicable).
Seller Cash Incentive - A seller cash incentive is offered to incent buyers to assume the lease or offset a deficiency (e.g. over mileage, higher monthly payment, etc.). The cash incentive is paid to the buyer at the completion of the transaction.
The seller cash incentive also serves to help offset, or subsidize the monthly lease payments. This results in an effective monthly lease payment that is lower than the actual monthly payment making the vehicle even more attractive.
;)
