Whether to Lease or Buy
People often get confused whether to lease or buy a car. In a lease vs buy option, some experts suggest that it is safer to lease a car than buying one. In the modern world, car buying is possible only if a person has a pool of money or by applying for a vehicle loan. When you buy a car through an auto loan, a huge sum has to be paid as down payment and the remaining amount should be covered by regular monthly payments, which would generally be bigger than what you pay for a new car lease.
Choosing a Car Lease
Car leases are generally of two types: closed-end lease and open-end lease. In closed-end lease, you can return the car to the lessor at the end of the lease term without paying any extra charges, provided you did not exceed the mileage allowance, the car did not experience any unnecessary wear and tear, or there is no other damage. Monthly lease payment will be higher in a closed-end lease. It may also attract extra finance charges since the lessors take all the risks. In an open-end lease, end of lease obligations are determined only at the end of the lease. The extra amount to be paid will be determined according to fair market value of the vehicle at that time. However, the monthly payments will be lesser because the lessee takes all the risks. In this type, excess wear and tear out of a lease is left to arbitrary determination.
There are also single payment lease and multiple payment leases. In single payment lease, you can pay the total amount for the lease term up front. This way, you will be free from monthly payment hassles. In multiple payment leases, the lease payments have to be paid in regular installments every month.
In a car lease, you will not gain immediate ownership of the vehicle. When you buy a car, ownership is assumed at the time of signing the contract. However, the title is not passed on until you fully repay the loan. When you deliver the vehicle to the dealer after completing the term of lease, he may charge you a disposition fee. Disposition fee is the amount that you have to pay the dealer in order to take the vehicle back into his inventory, or to prepare it for a second sale. However, if you decide to purchase the vehicle, the disposition fee may be waived.
Selecting the best lease deal, a leasing company, or signing a lease contract can be a challenging job. There are a lot of things that you have to understand and accept before entering into a lease agreement. Leasing is the best option if you wish to use a car for only five or six years. Similarly, if you are in a position to trade cars with a loan balance, you should be familiar with auto leasing, and how to lease. If you are finding it hard to repay the lease amount, there are agencies that will help to take over your lease. Even, the primary leasing company may assist you in an auto lease transfer. An auto lease dealer may charge you an exorbitant fee for early closure or cancellation of lease. In such circumstances, it is always better to look out for people who are ready to assume a car lease. By assuming a car lease, one can save a great deal of money. Since much of the term of lease would have been used up and the initial expenses paid up, people who assume an auto lease are sure to benefit. Due to the current economic downturn, used car leasing is also increasing.
Nowadays, you can check for best the lease deals and lease specials over the internet. Some websites provide a lease calculator by which you can have a better idea of the average amount that you will have to pay in order to lease a particular brand of vehicle.