Frequently Asked Questions
Who is responsible for insuring the vehicle?
The person leasing the vehicle must arrange and pay for full liability and collision insurance.
Who is responsible for the vehicle's license plates?
The person leasing the vehicle is responsible for registration fees and ensuring the vehicle has valid license plates and stickers at all time.
What if I know in advance I will exceed the kilometer allowance applicable to my lease term?
Through our discussions with you, we will determine your exact requirements and make recommendations as to the kilometer usage of your lease. We, at Shaw Lease, are particularly aware of commercial applications, higher kilometer usage, and the need for flexible terms for our lease customers.
What if I have to return the vehicle before the lease is up?
You can terminate your lease early, but charges may apply. Your lease agreement will provide details.
Can I purchase insurance so that my lease agreement obligations are handled in the event of a death or disability?
Yes, see us for details.
How does the vehicle warranty apply to a vehicle leased from Shaw Lease?
Regardless of the make or model, manufacturer's warranty applies. Extended warranties are also available.
Who is responsible for the vehicle's maintenance?
The person leasing the vehicle is responsible for all scheduled maintenance (e.g. oil changes, wipers, tires, brakes, etc.), unless covered by the manufacturer's warranty.
The customer who is leasing the vehicle (you).
The company that owns the vehicle and is leasing it.
Also known as a Finance Lease, Capital Lease or Equity
Lease. This is an agreement where the monthly payment and residual value
(buy-out) are specified at the start of the lease. There are no
kilometer restrictions or wear-and-tear clauses in this type of lease
because, at the end of the lease, the lessee guarantees the value of the
Closed-End Lease (Purchase Option Lease):
Also known as a Net Lease, Operating Lease, Fixed Cost Lease, or
Purchase Option Lease. Unlike an open lease, the lessee does not
guarantee a residual or buy-out value. The monthly payment is fixed at
the outset of the lease. In addition, the lessee agrees to a specific
number of monthly payments and to terms regarding the vehicle's
condition and kilometer. At the end of the lease, the lessee returns
the vehicle to the leasing company. This allows the lessee to fix costs
over the term of the lease for budgetary purposes. Some closed-end
leases also offer the lessee an option to purchase the vehicle for a
specific "fair" market value.
The length of the lease in months.
The total kilometres allowed the lessee during the length of the lease.
The lessee may pay a penalty per kilometer if the kilometer allowance is
exceeded, depending on the type of lease.
Also known as Fair Market Value or Lease End Value. The value, specified
in the lease, of the vehicle at the end of the lease. Occasionally, the
lessor gives the lessee the option to purchase the vehicle for this
amount at the end of the lease. This is not always the case. Check to
see that the lease contract includes this clause.
Sometimes called Residual or Fair Market Value. This is the amount that
the vehicle can be purchased for at the end of the lease. Fixed purchase
options have a specific dollar amount or a fair market value option.
This number may or may not be determined until the end of the lease, and
could reflect the current market value.
A stated amount that the lessee must pay if the lessee does not purchase
a vehicle at the lease end value. This fee varies greatly from lease to
lease. Many lessees do not notice this part of their contracts until
the lease is over, so it is important to be aware of it from the
Normal wear-and-tear is the stress on a vehicle caused by normal use. At
the end of a closed-end lease, the lessor holds the lessee responsible
for wear-and-tear that is in excess of "normal". Typically, a clause in
the lease agreement spells out excess wear-and-tear in detail.
The total price of the vehicle, capitalized by the leasing company, after down payments or trade-ins are deducted.
The amount of the monthly payment that goes to amortize the principle.
Depreciation also refers to the reduction of the vehicle's value due to
age, mileage and wear.
Capitalized Cost Reduction:
An amount paid by lessee at delivery to reduce the capitalized cost and thus reduce the monthly lease payment.
Money collected at delivery for security, typically in the range of one
monthly lease payment. The deposit is refunded, minus any lease-end
charges for wear-and-tear or excess kilometres, after the lessee returns
the vehicle and it is sold.