Vehicle leases are used widely by businesses in order to acquire vehicles at a lower cost, but individuals can benefit from these agreements as well. A lease is an alternative option to purchasing a car and entails an agreement whereby one has use of a car for a specified period of time. It is basically like renting for around two, three or four years.
The key difference between buying and leasing is that with leasing, after the primary term, the car must either be bought or returned to the leasing company. The agreement will usually include clauses that state things like the maximum amount of miles that can be travelled in the car. Exceeding this limit or terminating the agreement early will usually both result in extra fees.
There are numerous advantages involved in leasing, such as being able to drive a new car every couple of years without the hassle of finding a buyer for the old car. Instead the car is simply returned and a new model can then be leased. There is also little concern about the resale value of the car in future years.
Also, the monthly payments will usually be lower than paying off a car loan, and the financing is usually easier to qualify for. There is little or no down payment, making this a realistic option for those who do not have the option of buying, for financial or other reasons.
One disadvantage of leasing is that one will always have car payments but will not actually own the car. There are also mileage restrictions and insurance may be limited.
For the owner of the leased car, the car leasing agreement provides an income, as well as the option of leasing the car again or alternatively selling it. The main disadvantage is the worry of the future resale value of the car. The decision to either buy or lease will definitely be determined by individual circumstances, as well as the intended use of the vehicle.
The key difference between buying and leasing is that with leasing, after the primary term, the car must either be bought or returned to the leasing company. The agreement will usually include clauses that state things like the maximum amount of miles that can be travelled in the car. Exceeding this limit or terminating the agreement early will usually both result in extra fees.
There are numerous advantages involved in leasing, such as being able to drive a new car every couple of years without the hassle of finding a buyer for the old car. Instead the car is simply returned and a new model can then be leased. There is also little concern about the resale value of the car in future years.
Also, the monthly payments will usually be lower than paying off a car loan, and the financing is usually easier to qualify for. There is little or no down payment, making this a realistic option for those who do not have the option of buying, for financial or other reasons.
One disadvantage of leasing is that one will always have car payments but will not actually own the car. There are also mileage restrictions and insurance may be limited.
For the owner of the leased car, the car leasing agreement provides an income, as well as the option of leasing the car again or alternatively selling it. The main disadvantage is the worry of the future resale value of the car. The decision to either buy or lease will definitely be determined by individual circumstances, as well as the intended use of the vehicle.
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