Car has become an almost essential part of our lifestyle. However, the present tough times of the economy have made things even tougher, raising the needs for better solutions. One option that is becoming increasingly popular is car leasing. Instead of purchasing a car outright, leasing the car lends much more benefits than purchasing the car outright! For those who are not yet aware of, we outline some of the major benefits of car leasing:-
Lower monthly payments
Single monthly payments are always cheaper than accumulating the money to buy the car straight away. This might entail getting a car loan which will inevitably have added interest to pay as well. The fixed monthly pay out is often manageable and one can easily plan for it. Again, when you lease a car, you are just required to pay for the difference between the purchase price and the predicted value of the car at the end of lease which is also called residual value. This turns out much cheaper and gives you the flexibility to afford a more expensive car even on the same monthly budget. If you compare it to the car loan payments, the total cost comes out to be hordes cheaper.
No to nominal deposit
Leasing a car requires no deposit or an extremely small deposit which in turn lowers the monthly payments. Even though it is not a requirement, no deposit car leasing is an option open to all. It not only relieves you of the strenuous process of saving the deposit but also helps you get the car a lot sooner.
No hassles over bad credit
Bad credit is often a big hurdle when trying to procure a loan. But this is not a requirement or an issue while leasing a car. Thus, even people with bad credit score can easily get a car on lease.
No worry about depreciation
One of the costliest parts of motoring is the loss of vehicle value over time. This is the reason people look at residual value to calculate it worth at the time you would try to sell it. When you lease the car, this risk is shifted to the finance company and you no longer have to worry about it. While leasing it, you know exactly how much you need to pay and by the end of contract, you just return the vehicle.
Technology in-car is changing as fast as a person is changing clothes. New safety features, greater fuel efficiencies and improvements in the car entertainment systems are coming in so fast that even in a couple of years, your car can well feel outdated. When you buy a car, it implies that you are stuck with it for at least a decade or suffer financial loss while upgrading it. However, with leasing, you can actually get the latest model for you every two to four years. Thus unlike purchasing a car, leasing is the cheapest and easiest way to get the latest vehicle for yourself.
Avoiding of extra costs
Whenever you are upgrading your vehicle to the latest model, it is more than about impressing your neighbors. You also avoid all costs which come naturally with driving an older car which can be as simple as higher fuel costs. Newer cars tend to have fewer issues and if any problem comes up, it is usually covered under warranty. Again since MOTs are not required for vehicles which are on the road for less than 3 years, least contracts tend to avoid that expense as well. Another added advantage is that one need not worry about Vehicle Excise Duty. Often this is included within the contract and is not required to pay anything extra.
When a car is leased for business, one can actually reclaim 50% of the VAT deducted on your contract. This can be a major tax saving as well as money-saving instrument.