Depreciation is the difference between a vehicle's original value and its value at lease-end (residual value), and is the primary factor that determines the cost of leasing.

The leasing company may be, in fact, the car dealer, or it may be a finance company subsidiary to a car manufacturer, or an independent leasing company.

This leasing entity now owns the vehicles and is thus the lessor. Besides profiting from the sale of the car, the dealer enjoys financial incentives from the leasing company and manufacturer rebates.

The leaser acquires no equity in the vehicle. During the lease period, in fact, the leaser pays the leasing company for the car's deprecation, that is the difference between the list price of the car new and the value it has once it has been driven for the leased period. For this reason, consumers are better off leasing vehicles that hold their value.

smart USA has announced a nation wide leasing program. They are offering a 36 month closed-end lease is now offered to well qualified customers by Daimler Financial Services through participating dealers. This offer is subject to credit approval by lender.