Car leasing is the use of a vehicle for a fixed period of time at an agreed amount of money for the lease. Car leasing is one of the most misunderstood processes out in the auto and transportation industry.
Some people will tell you that car leasing is a bad deal. The naysayers will tell you that if you lease a car, you’re pouring money into a vehicle you won’t even own in the end. However, may of the people who choose to lease are very happy with the deal that they are getting.
Car leasing offers advantages to both buyers and sellers. For the buyer, lease payments will usually be lower than payments on a car loan would be.
Here you have some great information if you want to lease a car:
1. It’s an attractive alternative to buying a new vehicle. And plenty of people still lease their cars. More than 20 percent of vehicles are leased, with that number climbing to 50 per cent for luxury cars.
2. Leasing appeals to individuals who use cars for business, need a car for a limited period of time, or trade in their cars at regular intervals. With that many people choosing to lease over buy, there must be something to it. For starters, leasing is a fast and easy way to get a car with little or no down payment.
3. Although you do have to make monthly lease payments, think of it as rent. The amount you pay is usually significantly lower than car loan payments.
4 Money aside, you save time and hassle – you’ll save yourself from doing inspections and upkeep as well as the registration process when leasing a car.
5. Leasing a car is similar to financing in many ways, but there are some key differences. When you are purchasing a car, the loan value is based on the entire cost of the vehicle, minus your down payment and trade-in value. When leasing, however, you’re only financing the depreciation that occurs during the lease term + fees. At the end of the lease term, you simply return the car to the dealership.
Still there is a downside that we’d be remiss not to point out. The lease period is usually fixed, and you will have to see it through to the end, or else you will have to pay a termination fee. You’ll need to lease another car after the lease period is over. Also, you usually have a limit on the mileage you are allowed in the car. If you go over, you will have to pay more.
Car leases do not include an annual percentage rate, like car purchases do, but they include what’s called a “money factor”, which is a very small number that functions much like an APR. It is presented as a decimal and is very rarely written out in your lease agreement.
Make sure your dealer or salesperson is able to give you right details, in order to match you up with the perfect lease for your needs. You have to consider all of the pro, cons, and costs involved and determine which best fits their situation. Look at your budget and be honest about your mileage needs, lifestyle, and credit history before you make the leap.