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Along with the acceptance certificate, the lessee confirms that the leasing object has been delivered by the distributor completely and in proper condition. Normally, the term of the leasing contract starts with the acceptance. As soon as the lessee signs the acceptance certificate, the leasing company pays the distributor invoice and becomes owner of the leasing object. Furthermore, the lessee's payment obligation starts due to the leasing agreement conditions.

Most lease or finance agreements contain a transaction fee that is paid either at the end of the agreement or is covered by monthly payments. This usually covers fees for administration or insurance costs.

The acquisition price is generally the purchase price which is agreed by the execution of the purchase option.

When leasing objects are part of leasing contracts which are signed within the fiscal leasing decree, the leasing objects are assigned financially, fiscally and legally to the leasing company. Activation by the lessee does not occur; in this case, leasing objects are off-balance.

These expenses are paid by the owner if a vehicle is financed and by the lessee if it is leased. They particularly include maintenance costs, repairs and insurance premiums.

In finance: the long-term repayment of a money debt (e.g. bonds, mortgages) based on a fixed repayment schedule. In the case of a full pay-out lease agreement, the cost of acquisition and other costs, including the lender's finance charges, are fully amortized by the payments made by the borrower (e.g. Classic Credit). A partial pay-out agreement (e.g. AutoCredit, leasing) is the term used if only a partial amortization is achieved during the term of the agreement. With these agreements, full pay-out is only achieved by exertion of the possibility of subsequent purchase to the lessee or by extending the agreement for an appropriate period or by the lessee purchasing the item or by selling the financed item to third parties.

Total amount based on the annual repayment rate and the annual interest. A distinction must be made between invariable annuity (the annual repayment rate increases because the annual interest on the residual debt decreases), decreasing annuity (the repayment rate remains constant because the annual interest falls) and increasing annuity (the repayment rate increases more strongly than for an invariable annuity). Invariable annuity is usually chosen in car lease and finance.

The standard terms and leasing conditions regularize the extent of usage of the leased asset considering the conditions and intensity.

Annualized cost of credit expressed as a percentage rate; used in finance agreements. An annual percentage rate, or an equivalent rate, is not used in leasing agreements.

In economic or tax terms, the period of time under tax laws within which a commodity is usually "consumed" in a business.

In order to obtain bank inquiries of lessees who are not registered at the commercial register, the leasing company needs a signed authorization.

Method of finance by instalments in which, in addition to regular monthly payments, a higher final instalment is agreed with which the loan is finally discharged. This lowers the monthly payment and combines the advantages of leasing and financing.

The portion of the monthly payment that covers depreciation, any amortized amounts and rent charges. It is calculated by adding the amount of depreciation, any other amortized amounts and rent charges and dividing the total by the number of months in the lease. Monthly sales/use taxes and other monthly fees are added to this base monthly payment to determine the total monthly payment.

Commonly referred to as the "cap cost", this is the lease/loan price plus any administrative fee and other items included in the lease, such as extended service contracts, life, accident and health policies.

The sum of any down payment, net trade-in allowance and rebate used to reduce the gross capitalized cost. The cap cost reduction is subtracted from the gross cap cost to get the adjusted cap cost.

The lessee has to check the leasing object for existing defects or damages on disposal and, as the case may be, to claim directly. The provider of the leasing object has to clear every defect or damage and covers the resulting costs within the period of warranty. The lessee confirms delivery free of defects and damages and the leasing object identity.

The lessee receives a confirmation of the leasing application after a positive assessment by the leasing company. The leasing company starts the distributor order of the lessee simultaneously.

It is possible to extend the contract by mutual consent. However, it is not possible to exceed the maximum term of contract permitted. Amounts must be recalculated to determine the "new" monthly instalment.

When a vehicle is financed or leased, the costs of ownership (e.g. for fuel, oil, car washing) have to be paid by the borrower or lessee.

The solvency check serves to guarantee that the borrower or lessee will be able to meet his/her financial commitments throughout the term of contract. It is a part of professional contract application.

The solvency of the borrower or lessee. It is derived from a solvency check and is decisive for whether an application for a loan or leasing is accepted.

Cross-border leasing occurs when the leasing company and lessee are located in different countries and there are difficulties due to different tax- and financial-related conditions of the different countries.

The value of your vehicle at today's market price.

In case of any damages to the leasing object, the lessee covers the damage-incurring costs. The risk of any damages starts with the agreed transfer of perils.

Depreciation (or depreciation for wear and tear) are both fiscal terms for the amortization of assets. The Federal Finance Minister publishes amortization tabulations for consistent calculation of the depreciation periods. The tabulations contain almost all assets invested which wear off (e.g. buildings and mobile equipment goods) and include the so-called asset depreciation range of the assets. Assets which are utilizable in general – no branch assignment – are listed within the tabulation general usable assets.

In the so-called branch tabulations, assets are listed which can be assigned to certain branches. The asset depreciation range results in shortened depreciation periods in case of special usage intensity (excess shift usage). The depreciation periods of the tabulations are obligatory for the setting of leasing contracts.

The discount factor transfers expected benefits or costs (e.g. future leasing rates) in any given future year into present value terms.

An initial cash payment in a lease/loan due when the lease is signed, which reduces the capitalized cost or is applied to other amounts. See "Capitalized cost reduction".

With leasing arrangements, the purchase price for the items acquired from the leasing company is usually due for payment after said items have been taken over by the lessee.

Ending of the lease/loan before the scheduled termination date for any reason, voluntary or involuntary (for example, you return the vehicle early or default on the lease/loan, or the vehicle is stolen or totalled). In most cases of early termination, you must pay an early termination charge.

The amount you owe if your lease/loan ends before its scheduled termination date, calculated as described in your lease/loan agreement. The earlier your lease/loan is terminated, the greater this charge is likely to be.

The leasing contract ends when the vehicle is turned in to the leasing company. Depending on the contractual framework, the options of the lessee are negotiated at the end of term. These options are: contract prolongation, purchase by lessee or a third party. Some leasing contracts determine a fixed end-of-term date or automatic extension without any additional negotiation.

Your right to purchase a leased vehicle at scheduled termination in accordance with the terms specified in your lease agreement for a price determined by referring to a readily available guide to used-car values or another independent source.

Fewer kilometres are an element of kilometre vehicle leasing contracts where the lessee does not cover the market value risk. In case of a lower mileage compared with the contractual agreed mileage (= fewer kilometres) – depending on the form of contract – the lessee is compensated for the fewer kilometres.

The final account is an important element of leasing contracts, especially mileage contracts. For that purpose, the actual mileage is compared with the contractual agreed mileage. Furthermore, the assessment of the vehicle is conducted to identify damages and the wear and tear status.

A final payment is callable when the lessee executes his/her right of termination, or early termination in case of a terminable leasing contract or a term option contract. The final payment is set for the related end of term date within the leasing contract. The final payment guarantees the leasing company the non-amortized part of the investment or production costs of the leasing object.

With the receipt of the final payment, the property of the leasing objects stays at the leasing company, the leasing company sells the object best possible. The lessee is credited for the major part of the sales revenue for the deduction of his/her final payment.

Companies are able to lease their vehicle fleets within packages; no leasing agreement for each single vehicle is necessary. Fleet management reduces the administrative effort of the lessee extensively.

Leasing contracts containing additional services (e.g. maintenance, wear and tear).

Pre-formulated terms of contract for a multitude of contracts that one contracting party (user) entail on the other party when a contract is concluded. Also regarding leasing contracts, the General Terms and Conditions of Business define the reciprocal rights and duties of the contracting parties. As the leasing company has already rendered most of its obligation at the beginning of a leasing agreement, whereas the lessee is obliged to make payments for years, the leasing (rental) conditions primarily serve to protect these future claims.

With financing, the borrower is entitled to file a claim against the dealer based on liability for material defects. With leasing, such claims are assigned to the lessee under the leasing agreement.

The identity and signing powers of the customer and, if applicable, his/her power of representation have to be ascertained on the basis of his/her personal identity card, passport, extract from the commercial register or trade registration before the contract is signed.

Private customers and companies pay income or corporate tax on taxable income (profit). The leasing payments for leasing investments are, to the full extent, operating costs and reduce the taxable profit.

Insolvency refers to the inability to meet one's financial commitments and, in addition to over-indebtedness, is the reason for bankruptcy and composition proceedings.

If the borrower/lessee becomes insolvent, the financing company may instantly terminate the loan/leasing agreement, declare all the outstanding loan/lease payments discounted and due for payment and impound and then sell the loan/leased item. The sales proceeds − less the creditor’s own and third-party recovery expenses − are deducted from the borrower's/lessee's residual debt called due.

A kilometre contract is a special kind of vehicle leasing contract. The basis of the monthly leasing rate calculation is the agreed (kilometre) mileage, the term and the expected market value at the end of term. The lessee pays only the leasing payments for the agreed use of the vehicle and turns in the vehicle at the agreed end of term.

The whole investment costs of the vehicle are not amortized by the leasing contract. The leasing company carries the investment risk of the vehicle. However, at the end of term, the mileage and vehicle condition have to meet the contractual agreement. The lessee pays compensation in the event of considerable excess kilometres or the normal usage exceeding wear and tear. The lessee receives a partial amount per fewer kilometres in the case of considerable fewer kilometres.

A payment received after the specified due date. In most cases, a payment made after any fixed period triggers a late charge.

The leasing contract is agreed between lessee and leasing company and regulates all modalities of the deal. Different contractual frameworks can be arranged. The most important contract elements are the monthly rate, the term of payment and the mode of payment.

The lessee receives a leasing invoice that is valid for the whole leasing term and that contains all duty of payments (incl. VAT).

The leasing invoice also acts as a receipt for tax purposes (§ 14 German VAT Act).

The constant monthly lease or financing rates over the whole term. The linear payment progress benefits the lessee with a high planning reliability.

As leasing contracts expand necessary investments over a certain period and are tax-relevant, leasing is a liquidity-preserving kind of investment.

If you are not able to use your own vehicle after an accident for which you were not at fault (third-party liability damage), e.g. while it is being repaired, compensation is usually paid per day for the loss of use. The daily rate depends on the type of vehicle.

The lessee is contractually obliged, also in his/her own interests, to keep the leased vehicle in a proper and roadworthy condition at all times and to have maintenance and repairs carried out. As with conventional finance, the lessee must pay the maintenance costs of leased vehicles.

However, it is possible to include maintenance and wear service, which will then cover these costs. But the normal wear and tear of the leased vehicle which does not impair the usability of the vehicle is for the leasing company's account.

The distance driven after a specific time. For leasing agreements charged on the basis of kilometres/miles, the annual mileage is agreed as a basis for calculations.

The monthly payment means the amount the customer owes the bank or the leasing company each month. Calculations for the monthly finance payment are based on the financing method, the vehicle model, the term of the contract, any down payments and, if applicable, the residual value and the mileage.

A vehicle without any mileage or registration.

In case of leasing contracts with residual value accounting and termination without notice, the lessee is authorized to nominate another party who purchases the leasing object for a higher price than the wholesale price.

Describes the book value of an asset not yet amortized during the term of contract. It can differ from the actual market value due to the difference between amortization by monthly payments and an actual loss in value. After the (final) payment has been made, which discharges the loan, ownership of the vehicle is transferred to the borrower.

The present value denominates the actual cash value of future payments. The present value is the sum of the outstanding discounted payments. In general the discount rate is the interest rate which is used to determine the monthly leasing rates or which is offered for financial investment (opportunity costs). Payments with different terms, amounts and dates can be made comparable via the present value.

Leasing for private individuals. Private leasing is particularly widespread in automotive leasing business.

With full amortization contracts, it is possible to agree upon a purchase option. The purchase option enables the lessee to purchase the leasing object at the end of term. In this case, the purchase price is based on the book value or the actual market value. The market value is determined when the leasing object is actually meant to be sold. In general, the purchase option is only valid for private customers.

The manufacturer's suggested retail price. It is also known as the sticker price.

The registration certificate is issued by the motor vehicle registration authority (Road and Traffic Authority) when motor vehicles are registered for the first time or re-registered and is used to identify a motor-driven vehicle. The registration certificate contains important technical information which is the basis for the vehicle type approval, as well as the name and address of the person under whose name the vehicle is registered, the licence number and details concerning the general inspection carried out. However, it does not contain any information concerning exhaust emission checks.

In individual cases, a (rent) deposit is agreed with the lessee as an additional protection for the credit check or the residual value protection. The (rent) deposit is deposited as a guarantee and is yielded interest for the lessee.

Generally, the (rent) deposit is paid out with the last monthly leasing rate, the residual value, is cleared with the purchase price or is reimbursed.

The purchase value of an asset invested is amortized over the term partially per year, meaning that the purchase value is reduced. The balance sheet value results from the deduction annually until the complete amortization at the end of term. The balance sheet value is called residual book value. The residual book value can be an important element in the setting of leasing contracts.

The end-of-term value of the vehicle determined at the beginning of the lease and used in calculating your base monthly payment. The residual value is deducted from the adjusted capitalized cost to determine the depreciation and any amortized amounts. It is an estimated value that may be determined partly by using residual value guidebooks. The residual value may be higher or lower than the realized value at the scheduled end of the lease.

Voluntary self-disclosure serves to assess the financial situation of the applicant when he applies for vehicle financing or leasing. A distinction is to be made between information disclosed by private and business customers. A private individual preparing a self-disclosure provides particulars on him/herself as well as his/her income, work and living situation. Self-disclosure by business customers involves the customer providing detailed information on his/her company, e.g. about a balance sheet.

The right to acquire property is a purchase option. The right to acquire is an option for the lessee which permits the purchase of the leasing object. This right does not have to be executed by the lessee.

Voluntary self-disclosure serves to assess the financial situation of the applicant when he applies for vehicle financing or leasing. A distinction is to be made between information disclosed by private and business customers. A private individual preparing a self-disclosure provides particulars on him/herself as well as his/her income, work and living situation. Self-disclosure by business customers involves the customer providing detailed information on his/her company, e.g. about a balance sheet.

Very often, leasing contracts include several services which additionally benefit the customer. Services included leasing-object-related services (e.g. insurances) or even the management of vehicle fleets.

This refers to the duration of the contract. A specific term is agreed for financing and leasing, which is an important parameter for calculating the monthly payments. With leasing, the term is based on tax regulations and the reasonable economic lifetime of the leased item. Terms that fall below a duration of one year cannot be considered for tax issues.

The net value of your vehicle credited towards the purchase or lease of another vehicle. If you own the vehicle being traded in, you sell it to the dealer or leasing company. If you are leasing the vehicle being traded in, you turn in the vehicle (either at the scheduled end of the lease or upon early termination) to the dealer or leasing company who has agreed to pay any remaining balance on your agreement. The amount credited may be positive or negative, depending on the agreed-upon value of the traded-in vehicle and any remaining balance on your agreement.

If your finance contract is based on a variable yield, you can choose between two options: you select an adjustment of either your monthly rate or your contract term in the event of an change in interest rates. An interest decrease causes a monthly rate alternatively a term reduction for instance.

The vehicle price consists of the basic vehicle price plus options.

The vehicle registration document is an official document concerning the general approval of the vehicle for public road traffic. The personal details officially entered here refer to the individual or legal entity authorised to dispose of the vehicle. Such disposal authorisation refers only to the party responsible for the vehicle under public law. This means that it is possible to transfer ownership of the vehicle without handing over the vehicle registration document.

A guarantee that the vehicle will function and perform as specified. A warranty usually covers specific mechanical problems during a specified period of time or number of miles.