Who has not thought about getting a new car once every few years or so? You will not only get the latest ride but get access to the latest features and automobile technology. To some, this may sound like a dream that only rich people can achieve. Thankfully, it is now a reality through car leasing. You may have heard of the term already, and leasing a car is gaining popularity. But for someone new to this process, it is essential to understand in-depth how the process works.
What is car leasing?
Auto leasing began as a means for companies to move their car inventory quickly. Leasing also offers consumers access to the latest car models at a fraction of the cost. The appeal of leasing cars is increasing where the current statistic shows that of ten cars that exit a dealership, three of those are leased. By finding the best lease deals, you can choose just about any vehicle you like, whether it is a luxury SUV or a high-end sedan.
When you lease a car, what you pay over the lease period is the amount of depreciation including fees and interest applicable. If it is your first time looking for lease deals, it is essential to understand that what may appear to be a simple process could involve some complex aspects as well. But with some knowledge, you can ensure that your first time leasing a car is beneficial and pleasant.
Explaining the difference between buying and leasing a car
Buying a car is straightforward enough. You pay the price of the vehicle through a car loan, cash, or by trading in your current vehicle. With leasing, what you will pay is the total difference in the vehicle’s current price vs. the car’s expected value when the lease term ends. For example, you are thinking about buying a car worth $25,000, which is likely to depreciate in value to $15,000 after three years. The depreciation amount of $10,000 is what you will pay if you lease the car for three years. Note, however, that the cost may still include other fees and interest as applicable.
The main difference between buying and leasing a car, of course, is that at the end of the lease, you will return the vehicle to the dealership. At this point, the dealership may offer you the opportunity to buy the car you leased or lease another brand-new vehicle. It is also possible to check the best car lease deals directly with a dealership, or with the help of a car leasing company.
Since leasing a car means you are bound to a contract, it is also essential to understand the obligations associated with it. Leasing a vehicle is not for everyone. You need to carefully assess your needs to determine if leasing is your best option. Always weigh the pros and cons before signing a contract. Rental is an excellent opportunity to drive the car you want even if you do not have the cash to own it. Nonetheless, it is a financial commitment that requires commitment and preparation.