Most people often face the harrowing task of deciding between purchasing and leasing a car. Both the options may have their own set of advantages and disadvantages, which makes it even more difficult to select one option amongst the two.
Buying or leasing a new car
Leasing implies the agreement to use a car in exchange for a predetermined sum of money over a specific period of time. After the expiry of the lease, the car may be returned and another one may be purchased or leased. This may require making a financial decision at the expiry of the lease.
Leasing is however suitable for people who may not want to retain a vehicle for a long period of time. For such people, leasing may help to decrease the financial burden of buying a new car after a short period of time.
Most business organizations lease cars for the benefit of employees. Leased cars may be used to provide comfort and convenience to employees, for client visits, business promotions, team outings and many more purposes.
According to the CEO of eAutoLease, these best car lease deals can also help you in improving your employee satisfaction, because they will not have to travel in the age old cars. Therefore, it will eventually help in increasing your business productivity. Another added benefit for companies leasing cars is that they are saved from the financial burden of paying the entire cost of the car. The lease payments made cover basically the estimated depreciation of the vehicle for the time of the lease.
While leasing a car does not provide ownership of the car after the expiry of the lease, it provides a number of other benefits. Few of them include:
Leasing can prove beneficial for people who may not possess the financial means for purchasing a new car.
You can get an opportunity to drive a high end luxury vehicle which may be beyond your financial means.
Lease agreements provide a sufficient mileage cap ranging from 10000 to 15000 miles in a year.
The expiry of the lease provides the opportunity to rent another car of your choice.
Leasing a car provides a number of benefits. It may however be noted that leasing may also attract certain penalties. Such penalties may arise when:
The number of miles the car is driven exceeds the cap stated in the contract.
The exteriors and interiors of the car are not maintained properly.
The car shows signs of wear and tear and lower performance.
Penalties may also be imposed on returning the car before the expiry of the lease agreement.
It is hence important to consider these aspects before leasing a car.
Factors to consider before leasing a car
While leasing a car, it is advisable to pay attention to certain important factors in order to strike the best deal. While searching for best car lease deals, it is advisable to gather information about the industry. Having the required knowledge can help you bargain better. Leasing comprises of two main types of costs.
Capitalized cost equals the selling price while residual value reflects the value of the car at the expiry of the lease. The monthly lease payments are actually the difference between the two costs. In order to bargain, it is hence advisable to make efforts to raise the residual value of the car or increase the capitalized cost.
It is also advisable to conduct a research and check out lease advertisements in newspapers and websites. A thorough research can help in striking a good deal.
Steps for leasing a car
Leasing involves the following basic steps:
The first step involves choosing the type of car amongst various categories like sedans, SUV’s and many more.
The next step is to choose a suitable model by evaluating aspects like safety features like stability controls and ABS, mileage and budget.
It is advisable to take a test drive of the car before signing the lease agreement.
Compare the various types of lease deals available in the market.
The next step involves negotiating the price with the dealer.
Once you have signed the lease agreement and got possession of the car, the next step involves paying the lease amount on time.
You may exercise caution while using the car in order to avoid penalties.
The last step involves returning the car on the expiry of the lease.
Leasing a car provides numerous benefits. Paying attention to certain aspects can increase the benefits derived from a car lease.