subject: New Car Leasing Model May Assist The Credit Strapped [print this page] The sheer size of our country and the woefully inadequate options available for public transport that are cheap and convenient mean that most Australians need a motor vehicle to get around. Getting their driver licence is one of the first major goals of our teenagers and the second is buying their own car. Most of us, including our teenagers, are not flush enough with ready cash to purchase a vehicle outright, so we look around for suitable finance. The traditional model or regular finance method has been to use a hire purchase company, or if circumstances permit, get a personal loan from a financial institution.
In the excitement of finding the right vehicle, most borrowers dont think too much about the overall cost of the vehicle when the interest paid on the borrowings is included. They also dont factor in the depreciation cost. This is the amount of money that the vehicle loses in value as a result of it being in use, and is especially savage when the vehicle is purchased new, with some estimates putting the loss in value at 42% in the first 3 years of owning the vehicle. Add to that the ongoing running costs including insurance, registration and upkeep.
The next issue that many borrowers have is their on-going ability to pay off the loan over a period of several years, during which anything may happen to the capacity to earn a living and pay their commitments. It is not unusual for someone to suddenly become unemployed, to suffer a debilitating illness, have an accident or have to leave work to care for someone else. In all these scenarios, their income drops dramatically, and they find themselves unable to continue the repayments on their car finance arrangement. This affects their credit rating, and when circumstances improve, and they attempt to get another loan, their application may be rejected.
These two compelling reasons alone should have car buyers interested in the benefits of leasing their next car instead of buying it and there are providers in the market who can assist people with credit issues lease a near new vehicle. One provider in particular is able to offer cars from their own hire fleet to people having difficulty accessing finance. They are able to include in the hire price the registration, tyres, servicing and insurance so that there is an all-inclusive amount that the borrower needs to pay, knowing that this is it, and there will be no sudden, unexpected expenses to cover if the car breaks down and needs an expensive repair.
Rather than trawling through years of records regarding an applicants credit history, the provider checks the current financial situation, which may have improved dramatically. Provided their current income shows that they have the capacity to make the lease payments they are not refused finance without a very good reason. This new approach to car finance Brisbane may help to get some disadvantaged people back on the road.
