Leasing a car is one of the latest developments in the field of sales of automobiles. Unfortunately, it is also one of the most confusing concepts. Often people mistake the lease prices of a car for its buying price (https://www.letstalkfinance.co.uk/). The concept of leasing refers to the use of a vehicle for a fixed period of time for a fixed monthly payment. Instead of paying the entire price of the vehicle in the beginning, the consumer can make a small payment and then pay a monthly fee, which will be calculated according to the depreciating value of the car. The basic difference between leasing and buying the car is that in a leasing contract, the car should be returned to the dealership or seller at the end of the stipulated period.
In recent years, most businesses and individuals have been opting for the option of leasing the vehicle instead of buying it. The rationale behind this change is that most vehicles end up being worth only 35-40% of their purchase price within a period of 3-4 years, which ends up as a huge loss for the owner (https://www.letstalkfinance.co.uk/contract-hire-and-leasing). The main advantage of the leasing option is that it is much more cost-effective since the entire cost of the rentals during the contract term is usually less than the amount that the automobile has depreciated over the period.
The other advantages of leasing a vehicle include a change in a vehicle every 2-3 years, and leasing usually allows the consumer to opt for a vehicle above his price range. Also, there is no hassle of finding a buyer at the end of the contract period since the dealer takes the vehicle back. In case the consumer does not wish to part with the vehicle, he always has the option of buying the car at the end of the contract period at a depreciated value.
Along with benefits, there are certain disadvantages to this option as well. The first one is that there will always be a cap on the number of miles the vehicle can be driven for per year. The consumer can get over the limit set, but in that case, he will have to pay an additional fee. The other disadvantage is that lease contracts are highly binding, so before setting the term of the lease, always decide the term with a clear head.
It is highly important to clear all doubts regarding the leasing options with the dealer before signing the contract (https://www.letstalkfinance.co.uk/personal-car-leasing-uk). Several issues, such as a term of the lease, what comes in the definition of ‘wear & tear,’ mileage restrictions, and options at the end of the lease, should always be discussed at length. Once all the terms and conditions are clear, only then the document should be signed.
It is also highly advisable to compare several leasing options before making the final choice. Different sellers tend to offer different conditions on the lease. Once the consumer knows what is being offered in the market, he will never fail to make an informed decision.