Most of us have heard of car leasing, and we may even know a person or two who have chosen to lease a vehicle instead of buying one. Vehicle leasing is just like property leasing in that you pay a set amount per month to make use of the vehicle for a few years, but before you can do so, you have to settle an initial deposit. But more importantly, at the end of your contract, you don’t have to worry about selling the vehicle or swapping it – it’s as simple as returning it to the provider and choosing another deal if you want, with another brand new car. But before you sign on the dotted line, it’s still a good idea to learn as much as you can about the process and how it works so you can make the best decision. Here, then, is your expert guide to leasing a car: what you should know.
What it is
As already stated, leasing is just like renting, where you can have a new car to drive around without actually buying the car yourself. Instead, you are simply renting it, and this allows you to use it for an extended period, usually from two years to up to five years. From the beginning, you will already know how much the deposit will be, and you will also learn how much you will have to pay each month. A typical lease package will also have an agreed-upon mileage, so you have to estimate your yearly mileage and set this from the start. Once you are at the end of your contract, you can then return the vehicle.
A contract hire or leasing deal is immensely popular with business and personal customers due to its cost-effectiveness and low initial deposit.
How it works
The concept behind leasing a vehicle is relatively simple and easy to understand. You can choose a package that works best for your requirements and budget. You can even have a deal specifically tailored according to your needs, whether you want a specific yearly mileage, would like to pay a certain deposit amount, and so on.
You have to pay the initial deposit or rental, which is a portion of the overall cost of renting the vehicle. It can usually come up to about three months’ worth of monthly payments. Afterward, you will pay a fee every month, and this fee is determined by the depreciation of the car during the entire contract. After that, you may undergo a credit check, but the check isn’t as extensive as buying a car, and once you have arranged financing and other extras, you can determine the delivery date of your vehicle.
Tips for choosing your leased vehicle
To make the most out of your decision to lease, here are a few tips for choosing your leased vehicle:
- Set your vehicle parameters early on before you search. Your parameters can include your budget, the model of the car and its manufacturer, the body type, the fuel type, special deals or offers, and vehicles in stock.
- Once you have found the car you are interested in, ask for a quote and decide on the contract length, the mileage per year, and any extras, such as leasing with maintenance and insurance, specs, or factory options. Good luck!