Without having a huge amount of cash, it is not possible to drive the latest models of car. Once you buy a car you will definitely try to sell it after few years to enjoy a newer model. You will face huge depreciation in this way. Due to this factor many people choose leasing option because it is designed for short term purpose. It is a best way to show off your car to impress your neighbors without spending huge amount. It requires small initial payment and regular fixed monthly payments for specified period. You can lease a car for few months, one year and many years. It depends on your needs and requirements. If you want to stop the use of car, you can transfer the lease to desired person.
Buying a new car outright is not economical because it offers severe depreciation after 2-3 years when you try to sell it. There is no chance of depreciation when you lease a car. Car leases work on the principle of car rent where you rent a car from dealer for some period of time. The customer pays fix
ed monthly payments to cover the depreciation and company profit. After the lease period, customer returns the car to leasing company. It is possible to extend the duration of lease. Similarly customer can buy this car for permanent usage. It is reported that car lost 25% value in the first year. Similarly 13% loss is expected in second year in the form of depreciation. When you lease a car you will not face this kind of issue like depreciation. You just need to pay fixed monthly payment to leasing firm to drive brand new cars. Car leasing is flexible, economical, convenient and simple. It is ideal for business related people who want to raise their status in the market.
Car leasing operator tries to maintain high value and condition of car for the lease period. After the completion of leasing period the vehicle is returned to leasing operator. Due to this factor most of the leasing firms provide proper maintenance and service. The car warranty also covers the all types of maintenance and repairs. In short leasing firms is responsible for the car maintenance because it is still their property. It is reported that buying a vehicle outright would have same amount of cost. Buying a new car outright means that you are willing to drive same model car for many years. Similarly it shows that you have a pile of cash to invest. It is a desire of everybody to drive a new model of car every 2-3 years. Therefore car leases have become first choice of people in the world as it is a cheaper option.
Before starting the car leasing contract customer should understand the terms well. Leasing is not very simple as people consider. There are present certain stipulations in the contract like fixed maintenance cost, agreed mileage, initial deposit and monthly fee. If you are going over agreed mileage, it will generate additional costs. Similarly leasing operator will cover only general wear and tear of a car. In case of complicated mechanical issues customer will face the situation. It is not bad as it sounds because leasing operators share such information or terms in advance before the initiation of contract. More loss is expected when you purchase a car outright because vehicles depreciate fast. You will lose the half value of your car after 3 years and it is known as depreciation. You must know all such facts prior to go for car leasing option in the future.