Ever Since leasing deals came into the automotive market, it has become an incredible option for every car enthusiast. It is a deal so great it doesn’t seem real at all. Leasing a car is an alternative to buying your vehicle, which means you can rent a car for a specific period. In simple words, it is car rental but in a more fancy way.
A Lease is an agreement or contract where one party passes on the utilization of some object to another party for a predefined time in return for an installment of cash, commonly at regular intervals.
A car lease, Rather than the possession of a vehicle, is more likely a drawn-out rental over a set time that could be as short as a year or can even be up to four or five years. The monthly rent or amount depends on certain factors out of which vehicle’s depreciation is the most important. It is the amount of value the car has lost while a person has driven it. It also depends on the miles as well as the car’s condition at the lease-end. However, in the end, your monthly payment is going to be low only since you are just paying for the utilization of the vehicle and not the full price tag.
Leasing a car over purchasing one is a good option under certain factors, and the most important of which is Annual Mileage. If you put under 15,000 miles for every year on your vehicle, at that point renting, maybe a decent alternative. Mileage is the most significant component in deciding your vehicle’s resale esteem. A car driven just 10,000 to 12,000 miles for each year will be worth more than one that sees 15,000 to 20,000 miles on its odometer yearly. Your installment will be determined on the extended resale value, which means the higher the worth, the lower the installment.
Others who can choose lease over purchasing are ones who like having a late model vehicle and have planned a fixed sum for transportation costs. In addition to spending over a new car every two to three years, a low monthly installment can even help you get your hands on some luxury or expensive cars. It is a good deal for car lovers or people who are avid fans of luxury vehicles.
Apart from other factors, the main difference between finance and lease is ownership. In financing, you get to purchase/own the vehicle, whereas leasing could be taken as a long term rent for it unless your contract has the option to buy the car at lease end.
DISADVANTAGES OF LEASING:
- The main disadvantage is that despite monthly payments, you will never get ownership unless mentioned in the contract.
- There’s an annual mileage limit between 10,000 and 15,000 miles, and if used beyond, can charge fees.
- It is a confusing process, and customers can fall prey to scams.
- Once you’ve made a contract, you can’t cancel it, or else you will pay extra termination fees.
Leasing can be a good option when you are a car enthusiast and love trying newbies every year. People looking for low monthly payments and low budgets can even seek a leased car. However, everybody who wants to limit the expense of your motoring and believes in ownership should not go for it. Leasing is a complicated process, and to avoid scams and have a good value for money, you must act smart to grab a good deal.