Is Vehicle Leasing Right For You?

When you are leasing an automobile your lease is based on the concept that you are paying for the valued amount that the vehicle depreciates during the time that you drive it. If you aren’t familiar with the concept of depreciation, depreciation is the difference between an automobile’s original value and its lease-end value. Put simple, the difference between its price as a new car and what it could be reasonably valued at once you have driven it for the term of your lease. That difference amount is split over the monthly terms of your lease to make the monthly payment amount.

Advantages Of Leasing A Vehicle

Vehicle leasing allows you to drive a car that you might not otherwise be able to. This is because new car prices can be exorbitant, and out of the reach of the average car, truck, van or SUV buyer. When you combine this with the increased expenses of rents, mortgages, food, and other necessities, that means little is left over for the luxury of a car. However, using creative vehicle leasing can put you in the car you want with a leasing contract, and often you will pay less and have fewer worries than you would with a car purchase. With a lease, you also don’t have to go through the trouble of selling the vehicle once you’ve driven it and if you don’t like it that can be a real relief.

Types Of Vehicle Leasing

There are two basic types of vehicle leasing. They are called close-end leases, and open-end leases. Each has various benefits and one may be better for you than another, so it is a good idea to be familiar with both before you go to sign a vehicle leasing contract.

Closed-End Vehicle Leasing

Closed-end leases are what you will typically be offered when you go to sign a lease. Closed-end leases are the most common consumer lease in the vehicle market. With this type of lease you have a set term of dates, and must return the vehicle at the end of the lease agreement. Your responsibility is your monthly payment, and you may have possible charges for excessive mileage or any damage done to the vehicle that is your fault and not normal wear and tear.

You will have a set number of miles you can drive annually. The national average for vehicle leasing is 12,000 miles a year. If you exceed that, there is a per mile charge you will be responsible for paying. If at the end of your leasing term, the market value of your car is less than was estimated, the leasing company takes the hit for this amount of depreciation, you do not. This is because the open-end lease is composed with an expected valuation for the vehicle at the end of the lease. This is the main difference between open-end and closed-end leases. It is also one of the reasons that a closed-end lease is called a “walk away” leasing agreement. Even if you totally abused the car, unless it was specified in the terms of your agreement, you can literally walk away from the damages owing nothing beyond what you paid in your monthly agreement.

Open-End Vehicle Leasing

Open-end leases are typically used in commercial business leasing, such as fleet cars. However, you can find open-end leases as the average consumer as well. In open-end leasing the lessee, rather than the company who is leasing the vehicle, takes the financial risks. Typically in an open-end lease you will have a larger amount of annual mileage allowance. If you take an open-end lease you will be responsible for the payment of any difference between estimated lease-end value of the vehicle and the actual market value at the end of your lease term. This can be a problem if the market value of the vehicle has dropped during the term of your lease. So, consider very carefully before you sign an open-end vehicle leasing agreement.

Option To Buy With Vehicle Leasing

At the end of your lease you may have the option to buy. For commercial accounts, this is usually not in their best interest. Taking a new contract with newer vehicles is usually more beneficial for a company. For the average consumer, if you’ve treated the car well you may find that purchasing at the end of your lease is a valid option. This is because it’s likely the end of lease value of the car is more than was estimated in your contract. So, if the car has a higher valuation, you’ve actually already paid for miles of wear and tear that didn’t happen. This means you could purchase the car at the perceived value at the start of your lease, when it is actually worth much more on the open market. You can then either continue to drive the car, or resell the vehicle at a profit. This happens frequently with closed-end vehicle leasing.

Where To Find Popular Vehicle Leasing Online

There are many places where you can find vehicle leasing opportunities online. Two of the most popular choices are Lease Compare and Merchants Leasing. Lease Compare caters to the average citizen looking to lease a vehicle. Merchants Leasing deals with professional business contracts for fleet vehicles.

LeaseCompare.com

At http://www.leasecompare.com/ you will find one of the most popular online leasing quote companies. Lease Compare has access to multiple banks throughout the nation that perform vehicle leasing agreements. They can get you a quote on all new vehicles, as well as used vehicle leasing throughout the country. You will most likely encounter closed-end vehicle leasing with Lease Compare.

Merchants Leasing

At http://www.merchantsleasing.com/ you’ll find one of the most popular commercial leasing firms online. Merchants Leasing handles fleet vehicle leasing for businesses across the country and can provide you with quote packages. You will most likely encounter open-end vehicle leasing with Merchants leasing.