Leasing is a type of auto financing service that allows you to rent a car from the dealership for a specified period. You will be making lease payments every month to be able to drive the vehicle as per your desires. After the lease is about to end, you will have to choose between returning the car or buying it, if you want to keep the vehicle.
If you are concerned about the intricacies of car leasing, you should know about terms like a closed-end or open-end lease.
- A closed-end lease is a type of contract where you do not pay anymore after you have returned the vehicle unless you have caused some damage or if you cross the mileage limits. In this kind of lease, you already agree on the car’s value and how much it will depreciate during the lease term.
- Open-end lease, on the other hand, is a kind of rent; the future value of the vehicle is not there in the contract, which means at the end of the agreement, you may get a refund if the vehicle is worth more than expected. To know more about car lease, you can read more about it by visiting various sites like Genus Leasing, which offers you with car leasing facilities.
Benefits of car leasing
If you are unsure about the benefits available with car leasing, then here are six of the most prominent advantages that you must be aware of:
- With car leasing, you only pay for the difference between the purchase price and the residual value. There is no interest included, unlike the personal contract purchase where you may have high importance. Also, it is different from buying since you are not paying for the whole thing. This means you will be able to afford to drive an expensive vehicle on a monthly budget. Also, when you compare leasing to the loan repayments on the same car, your payments can be halved.
- If you are a person who loves to drive the latest car but cannot afford it, you can consider leasing, and with the help of car leasing, you can have a brand new vehicle and get access to regular upgrades. As the technology in cars is improving quickly, there are new safety features, higher fuel efficiencies, and improvements to the in-car entertainment systems being introduced all the time. This means that in a couple of years, your car might feel outdated. Buying a car means that you would want to drive it for a decade or more. However, when you lease a vehicle, you get the opportunity to drive the latest model with your choice of additional tech, driver aids, and other facilities. So, if you get bored quickly, leasing is the easiest and cheapest way to change the vehicles.
- Many PCP deals require some amount of deposit, which might make your initial payment difficult. So, with a lease, you can quickly drive a brand new vehicle from a monthly rental fee that is less than the initial charge. This makes leasing a perfect option for a range of circumstances. Especially if you have just started a job or don’t have enough money to purchase a new vehicle, you can think of leasing it.
- If you want to impress your neighbors with the latest model, you don’t need to buy a car every time. You can avoid the costs associated with driving an older car as well. Although with a new one you tend to experience fewer problems with car leasing any issues will be covered up under warranty. Also, leasing with car maintenance will cover your vehicle for routine servicing, repairs, and even premium tires. There are also leasing options that provide glass protection and breakdown cover. You can read more about the warranty you will be getting on the company’s website so that you can know and understand the warranty features.
- When you lease a car, you don’t have to worry about depreciation, which is one of the costliest parts of monitoring the loss value of your vehicle experiences. When you are buying a car, you have to look at the residential costs and try to work out how much it be worth when you sell it. But, with the help of leasing, the risk associated is unknown as your payments will be fixed, and you know exactly what you have to pay, and at the end of the contract, you can return the vehicle.
- Not all businesses can afford to invest in a new car, and SMEs might find it difficult to find resources to fund a new vehicle. So, with car leasing, you can take advantage of a range of tax breaks, especially if you are a business owner. This will also help you to get a benefit from mileage rebates to low emission savings. Also, with the help of business leasing, you can claim VAT on your contract. These claims are also allowed against maintenance costs and any excess mileage incurred during the lease period.
Also, before you sign a lease contract, you need to consider the following:
- If you pay the deal early, you will have to pay a termination fee.
- If you exceed the agreed mileage, you will have to pay extra mileage fees.
- Lastly, at the end of your contract, you will be required to pay for any damage to the vehicle.
Now that you are aware of the benefits and the things you need to consider while leasing, you can find the best deal of car leasing options. With a plethora of different options available, like PCP, PCH, bank loans, and hire purchase, it can be quite confusing for you to select the right company for leasing. However, you can read more about the car lease and its properties from the company’s website.