The advantages and disadvantages of car leasing

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Published: 16th September 2009
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The term "Car leasing" stands for rent a new or old car for limited period of use. Infact, car leasing doesn't have any complex meaning. So, you can easily understand its actual or real meaning, but you have to make sure that it touches your best approval. One thing that you can do, justify the common car lease terms and conditions and through these vital justifications you will get the advantages and disadvantages of car leasing.
Advantages
There are lots of advantages you will get by leasing a car. Here are some advantages for you.
1) At the time of car leasing as you have to make half downpayment for your newly leased car that's why your monthly payment would be 30%-60% less than other cars.
2) U.K leasing companies provide easy monthly payment facility for new car buyers that are more affordable for middle class family.
3) Most people like to lease such cars that includes with manufacturer's warranty coverage. So that if something goes wrong with that car, manufacturer will take its responsibility.
4) Most leases require little or no down payment, which makes car more affordable for buyers. However, you can choose a low down payment, or exchange your old vehicle and get less monthly or annual payment amount.
5) In most states of the U.K and in Canada, you don't have to pay sales tax on the entire value of a leased vehicle. Government will be asked to pay minimum value as tax. You can pay those taxes along with your monthly lease payments instead of rather being paid all at once.
6) If you have used a leased car, return back that car to the leasing company and walk away from there, unless you decide to buy it.
7) Generally, most of the U.K insurance Companies provide free "gap" protection policy for newly leased cars. Loans do not generally come from gap protection policy.
Disadvantages:
Although leasing a car has its benefits, it also has some very real disadvantages. If you lease, you are bound to pay monthly payments, and you will not have any other option of selling that car. Under a lease, you will get mileage restriction. Most leases provide yearly mileage restriction which is around 12,000 to 15,000 miles. If you exceed that limited mileage, you have to pay coverage fees (around 15 to 30 cents per extra mile).
"Early termination charges" can be asked by definite car leasing company if you decide to terminate car leasing contract before the definite period comes. In that case, you are bound to pay huge compensation charges to that car leasing company including annual taxes, fares, insurance coverage charges, annual maintenance charges etc.

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