An Overview of Car Leasing
There are numerous cars which are being introduced virtually every other day in the market these days. However rich you may be it is difficult to buy all of them and change them quite frequently. The only way you get to use most of these cars is car leasing. Car leasing is the most economically viable option rather than buying different cars or exchanging cars, which is economically viable at all. Using car leasing you can get to use different kinds of car without owning them.
There are many advantages in car leasing than actually a buying a new car. Firstly when you buy a car you would be stuck with the same care unless you dispose it off. Also when you sell as every as year goes by the car’s value keeps coming down because of appreciation. On the other hand in case of car leasing you will have the opportunity to use a brand new latest style of car by paying a nominal monthly payment. As far as car leasing goes you only have to pay for the portion of the whole car’s value rather than the car itself. Importantly car leasing does give you the advantage of getting tax benefits. If you take an example of car been take on lease for business requirements there are provisions in the taxation laws to deduct a portion of the whole lease payment.
There are certain points which need to be considered in car leasing they are:
- The length of leasing contract
- The car’s residual value
- The penalties which may be imposed on terminating the lease
- The amount of mileage the car gives.
- Natural wear and tear that has occurred for the car
- The depreciation of the car’s value.
Vehicles which have the lowest depreciation value actually have the best of the lease deals. Apart from the above features the safety features of the car as well the capacity of car matters a lot and they have to be checked. The most important factors among all the factors it is very essential for the dealers and the users must be very aware of the laws of vehicle leasing and also financing of leasing.
Car leasing has two types they are:
- Closed end leases:
In the case of closed end leases the car’s residual value is determined and fixed before the lease is actually signed. In fact users are also given the option of the purchasing the car to this residual value once the lease period expires.
- Open end leases:
Open end leases are quite different when you compare them with closed end leases. The residual value of car is estimated to an approximated figure before signing the lease agreement. This value is them compared to the car’s market value and user will have to pay the difference between the estimated value and market value.
Generally institution like Banks, financial groups of car manufacturing companies, credit unions etc. generally provide car leasing. The lease amount can easily be calculated online or by just calling these institution.