The Concept of Car Leasing



Car leasing was derived from the idea that not all people want to own a new car. There are car enthusiasts who do not have enough money to buy a new car or do not need it really, simply because they always go out on trips to another state or are expected to leave the country after a period of time (letstalkfinance). Thus, it is but a smart idea to choose car leasing and take advantage of the benefits that it may present within a specific time frame.

When you lease a car, this means that you are paying for the right to use it in a specified number of years, depending on your needs and preference. In simple terms, you are paying a fraction of the car cost, which is the part that you “use up” during the time that you are driving it (https://www.letstalkfinance.co.uk/van-leasing-uk). Typically, most car leasing companies require a minimum of three years, and at lease-end, you are expected to return the car in good working condition. After this, you have the option to have another contract again and select another model or type of vehicle of your choice.

It is also possible to buy the car at lease-end. You have the option to keep the car by paying the difference in its value. However, it may appear to be much higher in cost than the actual market value; therefore it is very seldom that customers choose this route.

Payment Terms and Conditions

Car leasing is a form of financing, and you have the option of not making a down payment (https://www.letstalkfinance.co.uk/uk-vehicle-leasing). However, you make your first payment at the time you sign your contract that will cover for the month ahead. In addition, you pay for sales tax only on your monthly payments, and you pay a financial rate that is similar to the interest on a loan. Again, payment terms may vary depending on the arrangement that you and the leasing company have agreed upon.

You may also have to pay extra at lease-end if the contract was not strictly followed. This usually happens when you have used the car more than the specified miles on the contract, or you have returned it with damages. It is because of these instances that the value of the car becomes lesser of what is originally expected by the car leasing company at lease-end; therefore, you will be obliged to pay extra. This is the reason why it would be best to check the contract and be on the safe side at all times to avoid getting into trouble. Because of this, more financially stable individuals prefer to buy a brand new car instead of resorting to car leasing.