Vehicle leasing definitely has its appeal, and more business and personal customers are opting for such deals because of their inherent benefits. For one, when you go for a vehicle lease, you don’t have to worry about the car’s depreciation – it’s not yours, so you will not have to deal with the lowered value of the vehicle after a few years. Secondly, vehicle leasing gives you the unique opportunity to drive the car you want but couldn’t afford otherwise if you were to buy it. Thirdly, such deals allow you to save money as well, and this is already apparent to many who are interested in vehicle leasing. The cost of leasing a vehicle is not as high as buying a vehicle, especially since the total monthly cost already considers the vehicle’s depreciation at the end of the term. But what else should you really know about car leasing before you opt for a leasing deal? Here are some quick facts.
Typical leasing deals or arrangements can last from one to four years. Your monthly payments can vary depending on the leasing provider’s computation regarding the drop of the vehicle’s value because of depreciation and the make and model of the car itself. The monthly payment can also change depending on the interest rate for financing, and you will have to settle an initial deposit which is often equal to three to nine months’ worth of the fixed monthly payment of the vehicle.
How to acquire one
The good news is that leasing a vehicle is a lot easier than buying a vehicle simply because you don’t have to go through such extensive credit checks. All you have to do is browse through a list of available cars based on your preference, your budget for the deposit, and your estimated monthly expenditure. Once you find a vehicle you are interested in, you can request a quote or get in touch with the leasing provider to get more information. When you have all your questions answered and have finalised the payment terms, you can submit your application. Upon approval, all you have to do is sign the agreement and decide on the delivery date.
Types of Leasing
There are two general types of leasing deals: first, leasing with the option of buying, and second, leasing as a contract hire deal. Leasing with the option of buying is just as the name implies – you have the chance to purchase the vehicle at the end of the term, and you have to make a final bulk payment at the contract’s end. But if you don’t have any interest in purchasing the vehicle at the end of the term, you can go for another leasing as a contract hire deal.
This is pretty popular amongst many businesses because it’s clear-cut and straightforward: you choose a car, set aside your budget for the monthly payment, and then return the vehicle at the end of the term. Many company cars are leased nowadays because it’s more viable for businesses – they can have a new car with a manufacturer’s warranty, but in the end, they don’t have to be concerned about depreciation.