Despite its popularity, there are still many people who denounce the idea of leasing a car rather than buying one, simply because they don’t know how the process works and are put off by unfamiliar jargon. The reality is, however, that it is surprisingly simple once you get to grips with it, and though there are a few potential drawbacks to consider (as is the case with any financial agreement), there are several great benefits to leasing that are well worth knowing about.
How does leasing work?
To put it in basic terms, you can think of leasing a car like a long-term rental scheme. You pay a fixed monthly fee (typically for 2-4 years) for the right to use a car. You will sometimes be given a few guidelines you must stick to during that time, such as a number of miles you mustn’t exceed, and at the end of the contract, you will have the choice to either pay up the rest of the value for the car, thus buying it, or simply hand it back at no extra cost.
What are the main benefits?
- When leasing, you can generally afford a newer, better equipped model than you could if you were buying outright.
- Newer cars are the least likely to develop problems with the engine, brakes, etc., as they haven’t been worn by age, hence less fuss for the user.
- Often, any necessary maintenance costs will be covered in your monthly charge, and are thus taken care of by your lender.
- The monthly payments are often smaller than those for a car loan, and there are lots of deals out there to be hunted out when it comes to personal car leasing, meaning you often have more options when it comes to make, model, budget and suchlike.
- Because you have no obligation to buy the vehicle at the end of your contract, you don’t need to worry about depreciation, or the hassle of trying to sell it on. You can simply drop it off with the dealer if you wish.
- In comparison to standard loans, lease contracts are a shorter and less tying agreement, allowing you to take out a new deal on a newer model after a mere couple of years, staying at the cutting edge of style, design and safety, and just generally keeping your options more open.