Car Leasing - Exploiting The Privilege Of Driving A Brand New Vehicle

Car leasing also referred to as contract hire is the process of acquiring possession of a vehicle for a stipulated period

. Leasing is suitable for persons who wish to exploit the privilege of driving a brand new vehicle every so often. Furthermore, this option is ideal for persons who do not wish to incur extra cost associated with maintenance and high depreciation.

Once the price has been agreed and the lease contract has been signed, the vehicle dealer sells the vehicle to a leasing company of its choice at the agreed price. Then the leasing company leases the vehicle based on the negotiated price. Ideally, the vehicle dealer acts as a representative or agent of the leasing company. You get to deal directly with the car leasing company when you begin to submit your monthly payments.

With the leasing option, you have the opportunity of choosing your desired car model. Nevertheless, you will need to choose the period you expect to keep the leased car, ranging between 24 and 48 months. You also need to decide on the annual mileage. In addition, you may need to decide whether to include the maintenance in the contract. Adding maintenance means that the responsibility of servicing, tires, repairs and parts belongs to the car leasing company. Signing the lease agreement means that you acknowledge the terms & conditions. Considering leasing is not renting, you will be expected to take responsibility of all maintenance, insurance, service, local fees, taxes and tags.

The benefits:

Car leasing offers several advantages besides being an alternative to purchasing a brand new vehicle. Considering you are paying for a portion of the purchase price, leasing attracts lower monthly payments. Furthermore, you get to benefit from lower up- front cash outlays because many of the car leases demand small amounts of down payment. Some promotional deals do not commit the buyer to making down payment. Nevertheless, you will be required to submit the first installment, official tag and registration fee.

You have the option of fewer maintenance costs with the leasing option. The majority of persons choose a lease period that last as long as the manufacturers warranty; in the event of something going wrong the repairs will be catered by the warranty coverage. The leasing option eliminates the problems of disposing used vehicles. Once the lease ends, you have the option of returning the vehicle to the leasing company, unless you choose to acquire full possession. Once the lease comes to a successful conclusion, you can return the vehicle to the car leasing company. Nevertheless, you have an option of purchasing the vehicle once the lease ends. You can also use the vehicle for a trade- in, in exchange for a separate lease or new vehicle purchase.

The disadvantages:

In case you opt for early termination, the penalties attributable can be exceedingly high. Furthermore, extra mileage will be at your expense. Moreover, in case the vehicle exhibits wear and tear that has exceeded the normal, you will be expected to cater for the variance.

by: Iren Georgieva

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