If you are looking to buy a vehicle but don’t have enough money to make a large payment, then you can consider getting a car on lease. You can consider leasing a synonym of renting. Instead of making a big payment to buy a car, you can get a vehicle in a lease by paying a small portion of the amount monthly to the leasing company. In this article, we will discuss the essential facts you need to before leasing a car. Without wasting any time, let’s get started with the article.
Types of car lease
When leasing a car, you have two options to choose one is a closed-end lease, and the other is an open-end lease. In the first option, you have to return the vehicle to the leasing company after the leasing period has ended and walk away. You should comply with the terms of the leasing company to avoid paying the penalties of the leasing company.
If you drive your car more than the expected number of mileage, you have to pay for the fees for the exceeded mileage. Also, the vehicle will be inspected at the end of the lease period, and if anything is found faulty in the car, then you have to pay for the charges.
In open lease end, the leases pay the difference between the residual value and the market value of the car that will be determined at the end of the leasing period.
Car leasing advantages
First of all, leasing gives you the benefit of paying a small amount of money to the company. You have to pay for the first-month lease payment and some down payment of the car. You can break the amount in 12 month car lease if you don’t want to keep the car too long. While when purchasing a vehicle in cash, you have to pay the whole amount of car at once, including the down payment of the car loan lender.
The monthly lease payment is much lower than the car loan payments. You are merely renting a car from the leasing company, and you don’t have to pay the whole amount of the vehicle.
Car lease disadvantages
Everything has its advantages and disadvantages, and the same is with the car leasing company. When you are leasing a car, you have to comply with the terms and conditions of the company to avoid paying an extra amount in the penalties of the company. Some companies give you a maximum mileage limit, exceeding the limit will cost you to spend more money.
Terminating the car lease also effects in paying the amount of car. Like if you got in an accident or the car got stolen, you have to pay for the whole amount of the vehicle. It is essential to read the terms and conditions of the leasing company before getting the car on lease.