subject: Vehicle Leasing [print this page] Most people are familiar with the concept of car rental, but many are entirely unaware of personal vehicle leasing. Car rentals are typically used on holidays or business trips, but vehicle leasing is used for longer periods even as an alternative to ownership.
Contracts typically last anywhere between 24 and 60 months, so it really is a long term transportation solution. Depending on what sort of contract you get, you may end up owning the car at the end of the contract, or you can trade up for a different model. This is one of the principle appeals of personal vehicle leasing.
Aside from the opportunity to drive a new car every couple of years, the real advantage of personal vehicle leasing is financial. It does away with the need to make a large capital outlay as you would to secure ownership of a car and replaces it instead with fixed monthly payments. Again, depending on the type of contract you get, these payments may include contributions towards the eventual ownership of the vehicle and may even include maintenance payments. This would mean that if anything goes wrong with the car you are already covered and it is the car leasing companys responsibility to fix it. So no unexpected spikes in expense.
Personal vehicle leasing is also appealing to many people due to the removal of disposal responsibility and depreciation risk on the part of the driver. That is to say that as ownership of the vehicle is retained by the car leasing company, responsibility to dispose of the vehicle when needed lies with them. Anyone who has ever had to get rid of a car will know how much of a hassle this can be and will be glad to be rid of it.
Similarly, any depreciation risk lies with the vehicle leasing company, meaning that the lessee doesnt have to shoulder the reduced value of the vehicle due to use, age and market demand. Under some contracts (the cheapest), the lessee only pays against the depreciation risk, so the leasing company is simply not losing out on anything.
There are many advantages to personal vehicle leasing, and in straitened times where ownership is becoming less of a primacy than before (think about your mobile phone contract or your cloud music subscription), vehicle leasing could well begin to take off as an alternative to ownership.
