Leasing is basically long-term rental agreements that offer low monthly repayments. Once the contract ends you hand the car back to the company. Let’s see in details what it is and how it works.
Leasing a vehicle is like leasing anything else. When you rent a house or flat, you pay a deposit, and then use the rented house for the agreed period. During this period you pay a certain amount as rent on each month. After the end of the contract, you give back the property to the landlord.
The case is same with car or vehicle leasing. You pay a deposit to the vehicle leasing company and then pay an agreed amount on a monthly basis. Once the deal ends the car goes back to the leasing company. Just like with any property, you may have to pay out if there is any damage to the car.
How Does Leasing Work?
A leasing contract may work for two to four years. The length of contract may depend on your requirement, and for how long you may require the car. When you opt for the leasing, you have to choose a vehicle first. And it’s the same reason why leasing one car is very different from the other. It’ll give you an idea how much budget you may have for the car. It is very important to understand the various leasing deals available for you. That will give you a fair idea of the car that you can afford.
There are car deals that start for very less, so getting the right deal may not be very difficult for you. Once you choose the right deal, you may have to get the finance approved and agree to the term of the lease or the mileage limit. Next, you will have to get approved the finance and agree to the term of the car lease. Before you can do that, you’ll need to get approved for the funding and accept the term for which you want to lease the vehicle and may be the mileage limit as well. Once the car is ordered, your dealer will arrange the finance of the car. Some people prefer to get the leasing as it often covers the road tax and the also includes the breakdown of the vehicle.
But, there are few things that you may have to consider. First is that you don’t own the car and the leasing deal often comes with some conditions. It may include, driving for a certain number of miles and keeping the car in the right nick.
What Happens When The Lease Ends?
Once the agreed contract term has come to an end, there are two possibilities. One that you extend the lease of the vehicle, in which case, you’ll have to reach out to the vehicle leasing company few months before the contract ends. You can also choose to return the car, and if it is in good nick, you’ll have to pay nothing.
Finally, vehicle leasing is an attractive option when you want to avoid the liabilities associated with owning the car and don’t want to pay a large amount upfront.