Leasing a car can be a solution to different financial challenges in cases where you are not ready to buy. Sometimes we may wish to drive a new car or drive the latest car. Due to our low budget, however, it becomes very impossible to make this a reality. Cars are essential to our lives as it helps simplify our everyday task and routine. Having a car saves you a lot of stress. Dropping children off at school, going early to work, and more are all alleviated with a car lease!
Car Leasing gives an opportunity to drive a new vehicle
Car leasing allows you the opportunity of driving a new vehicle for a specified period. All this must be agreed with the amount stipulated to be paid every month. When you lease a car, bear in mind that it doesn’t require any hefty upfront payment or any loan approval. This is part of the benefits of leasing a car as you are driving it on a long term rental. As soon as the fixed lease period expires, then you are expected to return the vehicle to the leasing company.
In a case whereby you are running a low budget which cannot be used to purchase a car of your choice, leasing can go a long way in helping you. When you lease a car, it gives you the privilege of using a vehicle for a short fixed period of time. You’ll also have to pay a monthly fee which is very cheap. The down payment cost is always affordable. They comprise of interest, taxes, rental charges and depreciation cost. Sometimes we may end up spending money in the long run, And for you to avoid this, it is better to pay close attention to the fine print. To help you out, we are going to explain the pros and cons of leasing a car.
What are the advantages of leasing a car?
This is primarily one of the benefits of leasing a car. You are only obliged to pay for the depreciation of the car. Driving a brand new car can be really amazing, but you need to pay for the depreciation of the vehicle. A brand new car cannot be brand new forever as they are many cars that will be released. In such a case leasing companies make sure depreciation price is paid so that they don’t run at any loss.
Another advantage of leasing a car is the commitment issues. Most people have the problem of selecting the type of car they like. They can hardly decide the vehicle model that they prefer and the type of interior to choose. An average car leasing contract is estimated to last for 2 to 4 years. As soon as it expires, the vehicle reruns back to the company. The benefit surrounds the period at which the car is returned as you are opportune to trade your car for a new one. An upgraded model may be granted to you, or a different new vehicle may also be given.
This also comes with the privileges which include being up to date with the latest features of the car manufacturer. In such cases, you are allowed access to new warranty which includes servicing and changing of oil.
No down payment is required with a car lease
Another advantage of leasing a car is dropping off down payment. While you may be bothering if you have enough money to pay ahead, the fact remains that you can get a car without worrying about cash upfront.
Disadvantages of leasing a car
Now, let’s discuss the disadvantages of leasing a car. Before getting overexcited about low commitment and low cost, which are part of the benefit of leasing a car, it is important to know the disadvantages as well. The problems surrounding leasing a car include:
Returning the car
No matter the amount of payment paid throughout the car usage, the car must be returned to the car leasing company. You will never claim ownership of the car you drive. As soon as the lease term ends, you are expected to return the vehicle. If you want to still apply for a lease of the same vehicle after the period has elapsed, you must follow the due process from scratch. Note that no equity is available for the purchase of your next vehicle.
Low price tag
While you may like the fact that you can upgrade your vehicle after every 2 to 4 years after use, you should be careful about how often you do it. If your aim is to consistently change your car after a few years of usage, in the long run, you may not have any vehicle to call your own.
Car lease contract
In every car lease contract, there is always some stipulated guidelines to follow. Failure to follow them attract some penalties. Some of these guidelines include the mileage cap which restricts you to a yearly kilometer limit. Most times it is estimated around 25,000 kilometers per year. In other cases, you may have a long commute to make some road trips, and at the end of the car leasing term, you may likely face some steep charges.
Payment of damages
With a car lease, expect to be charged with some damages like wear and tear on vehicle exterior and interior, dings, etc. If you have commitment issues and decide to call it to quit even before the due date of your contract, make sure you fork the remaining cash on your lease agreement. In some cases, this may be upwards toward some thousand bucks. The truth is most of these charges are hardly discussed while entering the contract agreement but if you closely read up the terms and conditions, there are well highlighted there. Make sure you pay attention to all the full details of the contract.
Whenever you choose to walk away from the contract before termination, bear in mind that you may be warranted to pay huge termination fees. This is just in case your car lease term is not completed. In some unfortunate cases, it may be equal with the remainder of your lease payments.
Car Loans of America eases the stress of a car purchase
Here at Car Loans of America, we help reduce the stress of a car purchase. We understand how it feels to discuss with car dealers and still be refused of the of your choice due to financial difficulties. We will match you with an available local dealer that has the best car lenders to work with. Whether you’re looking to get an auto loan, car leasing advice or for approval odds and comparisons, Car Loans of America is here to assist you with any of your auto finance needs.