Essential Car Leasing Tips You Should Know
Owning a car may be an exciting dream come true, but can come along with so many responsibilities that you might be unprepared for. This is one of the grounds where leasing finds a foothold. Car leasing takes away those burdens that owning a car would naturally heap on your shoulders. Check out company reviews about car services to know more.
What is a Car Lease?
A car lease simply means being able to use a vehicle of your choice through a signed contract where an agreed monthly remuneration is paid by you to the dealer for some time. This continues until the end of the contract where the car is returned to the dealer.
Car leasing often comes with an option of purchase. But if this is not stipulated in a contract, you’ll have to return the car at the end of the contract expiration. There is also a set distance limit which you can drive. This can be determined by the customer but will incur a higher fee. Maintenance isn’t much of a problem as most new cars come with a warranty. However, you can check this car service article for maintenance tips.
Merits and Demerits of Car Leasing
- Merits
Leasing allows you to drive a brand new car without owning it. And such cars come with a warranty that takes away the greater chunk of the responsibility off your shoulders. By this, the BMWs and Mercedes would surely find space on your preference list.
Monthly payments as stipulated in the contract aren’t as costly as taking a car loan purchase. - Demerits
The dealer is faced with the danger of incurring losses. This is because most of the car’s responsibility returns to him as the owner and the car’s value depreciates in the long run.
Differences between Car Lease and Car Rental
The major difference between a car lease and a car rental is that the former is more of a long-term deal than the latter. A car rental contract can exist for as short as a couple of hours, but a car lease contract can run for months and years.
Car Lease in the UK
Car leasing is available in most parts of the UK, both for businesses and personal use. Companies usually make car leasing provisions for some or all of their staff. The costs of such contracts are significantly covered by the companies and not the individuals.
Electric car lease is also on the rise as a means to curb the menace of carbon emissions in the atmosphere.
Short-term Car Lease
Although car Leasing usually exists as long-term deals, provisions are often made to cater to short-term car lease deals. A short-term lease called “Flexi-lease”, allows an individual to run a 3-month contract period with an option of an extension at the end. You can read about AnyVan and EasyRentCars, two companies that offer car leasing services.
How to Lease a Car
Leasing a car involves many processes among which arriving at a price is key to the contract agreement. Below are some important terms you should know.
- Residual Value: This refers to a vehicle’s worth at the end of a contract.
- Manufacturer’s Suggested Retail Price: This is the original price of a new car.
- Capitalized Cost: This refers to a possible price arrived at after negotiation.
- Depreciation Value: This refers to the resulting difference between the worth of the new car and its residual worth.
- Lease Rate: This refers to the interest rate spread out in your monthly payment.
- Mileage Restriction: This refers to the distance limit permitted in the contract agreement. A breach of this will incur further costs.
- Lease Term: This is the duration of the car lease deal.
A car lease affords you the chance to use brand new cars which you may not be able to afford in reality. This flexibility takes away the burden of ownership.
