The Pros and Cons of Leasing a Car

Car leasing is a method of acquiring a new car, van or any type of vehicle for you to be able to use it. It gives people who do not have the financial capabilities of purchasing a car in cash the opportunity to have one, and pay for it in a convenient monthly basis. However, the ownership of the car remains to be that of the leasing company and not of the person who leased it. After the end of the leasing contract, the lease has the option to buy the car in a price lower than its actual cost or get a new car to be leased for a year, or even more.

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Photo Credit: Kiplinger via Pinterest

There are many benefits that comes with leasing a car. Fleet car lease can also come cheaper but a single fully novated lease is also as beneficial as the earlier. Car leasing is often cheaper than having car loan payments monthly. This is since in the end of the lease, the person that has used the car does not have ownership over the vehicle. Both parties however benefit during the whole of the lease. The leasing company retains the ownership of the vehicle adding it to their asset while the person who lease the car has benefited from the use of the vehicle during the term of the lease.

Another major benefit is that car leasing payments usually work out less per month than car loan repayments. The person does not own the vehicle at the end of the contract but this can be a benefit. For starters, the person that uses car leasing does not have to worry about the depreciation in value of the vehicle. This is because at the end of the contract they simply return the vehicle to the owner and thus they do not have to worry about the value of the vehicle or the hassle of having to advertise and negotiate a sale. This can make changing vehicles a doddle. This is an extremely appealing aspect of car leasing.

Leasing a vehicle rather than buying one in cash or getting a car loan because it allows them to manage their funds easily. This is perfect for people that are not confident with their monthly outgoings and expenses. Deals in getting a novate lease vehicle also include a breakdown of the maintenance cost of the car during breakdowns and repairs. In this way, one can avoid being surprised with unexpected monthly costs that comes with owning a vehicle. Owning a car that is not leased on the other hand comes with unpredictable maintenance cost that may be a burden on your finances in the long run.

Car leasing also enables people to afford vehicles that would ordinarily be out of their price range. Because the monthly payments can be less than the monthly payments on a loan it can mean that you can stretch to a vehicle that would typically be too expensive. You also do not have to put down the massive down payment which is required when purchasing. It also makes updating your vehicle simple because at the end of the agreement you simply return the keys and then you can find a newer model without any stress of having to sell the vehicle on.

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