What is car leasing ?
Before looking into how to lease a car, it’s important to first ask yourself, what is car leasing? Car leasing is a broad term as it is frequently used to describe several different types of finance agreements. Typically it refers to ‘Contract Hire’ which is a rental agreement whereby you are loaned a vehicle at a pre-agreed monthly cost. There are several different types of lease available, including Personal Contract Hire for private individuals. In all of them, however, the car still remains the property of the leasing company, relieving you of many of the costs and responsibilities associated with vehicle ownership.What is car leasing
The monthly rental cost of leasing arrangements are usually lower than purchasing a vehicle outright, as you are not paying to own the vehicle at the end of the contract. Typically a lease agreement will also benefit from a smaller deposit, usually equivalent to between three and six months’ rental costs. Businesses can also gain a number of tax advantages, including a reduction in VAT What is car leasing
When leasing a car, you select a contract term and mileage. If you exceed the agreed mileage allowance then excess charges will apply on the additional miles. It is up to you to keep the vehicle serviced and maintained in line with the manufacturer’s service regime. Maintenance packages, however, can be added to the monthly cost of the vehicle in order to cover these additional elements if required.
What is car leasing
Vehicle Leasing offers advantages to both buyers and sellers. For the buyer, lease payments will usually be lower than payments on a car loan would be, and qualification is often easier. Some consumers may prefer leasing as it allows them to simply return a car and select a new model when the lease expires, allowing a consumer to drive a new vehicle every few years without the responsibility of selling the old vehicle. A lessee does not have to worry about the future value of the vehicle, while a vehicle owner does. For a business lessor there are tax advantages to be considered What is car leasing .
What is car leasing For the seller, leasing generates income from a vehicle the seller still owns and will be able to lease again or sell through vehicle remarketing once the original (or primary) lease has expired. As consumers will typically use a leased vehicle for a shorter period of time than one they buy outright, leasing may generate repeat customers more quickly, which may fit into various aspects of a dealer’s business model.