If you would enjoy a new vehicle but don't want to buy it, or would like to be able to trade it in for something else after a year or so, then car leasing could be right for you. Vehicle leasing is very popular these days because it lets you have drive a brand new car without having to pay out the large payments that go along with ownership.
What is car leasing?
Basically, vehicle leasing means you rent the car from a finance group that has purchased the car. After the lease term has finished you have the option of paying for the rest of the vehicle or trading it in for a brand new model.
Benefits of Vehicle Leasing.
There are many benefits to vehicle leasing. Car leasing is great if you use your car for business, want to lease a car model you wouldn't be able to afford if you bought it, or if you want to be able to trade in a vehicle after every two or three years. Below are more benefits you might find attractive.
* Low deposit: When you purchase a car you often need to put a deposit or a combination of a deposit and trade-in to front your loan amount. When you lease, you will still need a deposit, but it will be a smaller amount. This means you can invest the money you save instead of putting it into a car.
* Lower monthly payments: Payments are lower when you use a vehicle lease because you are paying for the depreciation on the vehicle, not the total car price.
* Easy trade-in options: If you're one of the many that like the benefits of driving a new car, you can rest easy when it comes to trading in your leased car at the end of the term. The finance group owns the vehicle, not you. You're not stuck with the headache of selling the vehicle or getting a better deal for a trade-in.
* Flexible car lease terms: Many vehicle loan finance companies will offer flexible lease term options. Though most leases begin at two years you can expect to see some leases last as long as 60 months (five years).
* Secured Lease: The lease is secured by the vehicle, so if you default in your car lease payments the finance company will repossess your car. Though unpleasant, it's not as scary as the thought of losing something more drastic, such as your home.
Business Lease Benefits.
For companies that lease vehicles, the car leasing payments generate GST (Goods and Service Tax) and therefore can be claimed back in most cases. If you purchase a car for business and want to have it financed instead, some finance companies (for example, www.fincar.com.au) will buy your vehicle and lease it back to you.
Disadvantages.
Like anything good in the world, there are disadvantages to car leasing. Some are equity related, while others have to do with fees. Read on to see if these disadvantages will turn you off from pursuing vehicle leasing as an option.
* Lack of Capital: If you purchased the car outright by yourself instead of getting involved with a car lease, you would have capital in the vehicle over the duration of ownership. When you use vehicle leasing the capital belongs to the finance company, not you.
* Early termination fees: Some car leasing companies will charge a fee for early termination of your lease. Some finance companies will not hold you responsible for an early termination fee if you cancel your vehicle lease after the first six months while others will. Check to see what the terms are, so you do not find yourself saddled with surprise fees.
* Overage fees: Most auto leasing policies bill you a significant penalty if the odometer displays more kilometers on the dial than were specified in the contract. You'll pay a few cents per km, but remember that it adds up. If you are charged $.10 per km, a 1,000km overage will cost you $100 extra at the end of your lease.
* Fees for a less-than-perfect returned vehicle: If you're tough on your cars you might not want to think about car leasing because you'll be billed for excessive wear and tear on the auto's interior and exterior. So if you have an busy family or enjoy water dogs you may want to think about owning a car instead.
At the end of your lease, what are your options?
The great thing about vehicle leasing is that there are many options open to you at the end of your lease period.
* You can trade in your vehicle and start the process again with another new car lease. The advantage is having a brand new car again in a short period of time - who doesn't love driving a new car?
* You are under no obligation to purchase the car, but you could, if you wanted to do so. Usually when you enter a vehicle leasing contract, a price to purchase the vehicle at the end of the lease is outlined and stated in your paperwork.
* You could return the lease vehicle and go a totally different route, such as buying a new or used vehicle elsewhere.
Leasing is a viable option for disabled Australians.
If you're disabled then you may qualify for car leasing GST-free. You must have a certificate from the HSA (Health Services Australia) or be a Veteran who is disabled due to service in Her Majesty's armed force. Generally, this option is available if the vehicle lease is for a car under $57,000 (approximate), for a period of two years minimum and the car is used for less than 40,000km travel a year. Of course, other details may apply, so read the fine print carefully.
In Conclusion.
Car leasing is a great opportunity for someone that likes driving a new car and trading in a vehicle every few years. It's also a fantastic option that allows you to drive a luxury vehicle you may not be able to afford normally. There are many vehicle leasing options, so review them carefully and choose the best one for you to make your experience exciting and rewarding
What is car leasing?
Basically, vehicle leasing means you rent the car from a finance group that has purchased the car. After the lease term has finished you have the option of paying for the rest of the vehicle or trading it in for a brand new model.
Benefits of Vehicle Leasing.
There are many benefits to vehicle leasing. Car leasing is great if you use your car for business, want to lease a car model you wouldn't be able to afford if you bought it, or if you want to be able to trade in a vehicle after every two or three years. Below are more benefits you might find attractive.
* Low deposit: When you purchase a car you often need to put a deposit or a combination of a deposit and trade-in to front your loan amount. When you lease, you will still need a deposit, but it will be a smaller amount. This means you can invest the money you save instead of putting it into a car.
* Lower monthly payments: Payments are lower when you use a vehicle lease because you are paying for the depreciation on the vehicle, not the total car price.
* Easy trade-in options: If you're one of the many that like the benefits of driving a new car, you can rest easy when it comes to trading in your leased car at the end of the term. The finance group owns the vehicle, not you. You're not stuck with the headache of selling the vehicle or getting a better deal for a trade-in.
* Flexible car lease terms: Many vehicle loan finance companies will offer flexible lease term options. Though most leases begin at two years you can expect to see some leases last as long as 60 months (five years).
* Secured Lease: The lease is secured by the vehicle, so if you default in your car lease payments the finance company will repossess your car. Though unpleasant, it's not as scary as the thought of losing something more drastic, such as your home.
Business Lease Benefits.
For companies that lease vehicles, the car leasing payments generate GST (Goods and Service Tax) and therefore can be claimed back in most cases. If you purchase a car for business and want to have it financed instead, some finance companies (for example, www.fincar.com.au) will buy your vehicle and lease it back to you.
Disadvantages.
Like anything good in the world, there are disadvantages to car leasing. Some are equity related, while others have to do with fees. Read on to see if these disadvantages will turn you off from pursuing vehicle leasing as an option.
* Lack of Capital: If you purchased the car outright by yourself instead of getting involved with a car lease, you would have capital in the vehicle over the duration of ownership. When you use vehicle leasing the capital belongs to the finance company, not you.
* Early termination fees: Some car leasing companies will charge a fee for early termination of your lease. Some finance companies will not hold you responsible for an early termination fee if you cancel your vehicle lease after the first six months while others will. Check to see what the terms are, so you do not find yourself saddled with surprise fees.
* Overage fees: Most auto leasing policies bill you a significant penalty if the odometer displays more kilometers on the dial than were specified in the contract. You'll pay a few cents per km, but remember that it adds up. If you are charged $.10 per km, a 1,000km overage will cost you $100 extra at the end of your lease.
* Fees for a less-than-perfect returned vehicle: If you're tough on your cars you might not want to think about car leasing because you'll be billed for excessive wear and tear on the auto's interior and exterior. So if you have an busy family or enjoy water dogs you may want to think about owning a car instead.
At the end of your lease, what are your options?
The great thing about vehicle leasing is that there are many options open to you at the end of your lease period.
* You can trade in your vehicle and start the process again with another new car lease. The advantage is having a brand new car again in a short period of time - who doesn't love driving a new car?
* You are under no obligation to purchase the car, but you could, if you wanted to do so. Usually when you enter a vehicle leasing contract, a price to purchase the vehicle at the end of the lease is outlined and stated in your paperwork.
* You could return the lease vehicle and go a totally different route, such as buying a new or used vehicle elsewhere.
Leasing is a viable option for disabled Australians.
If you're disabled then you may qualify for car leasing GST-free. You must have a certificate from the HSA (Health Services Australia) or be a Veteran who is disabled due to service in Her Majesty's armed force. Generally, this option is available if the vehicle lease is for a car under $57,000 (approximate), for a period of two years minimum and the car is used for less than 40,000km travel a year. Of course, other details may apply, so read the fine print carefully.
In Conclusion.
Car leasing is a great opportunity for someone that likes driving a new car and trading in a vehicle every few years. It's also a fantastic option that allows you to drive a luxury vehicle you may not be able to afford normally. There are many vehicle leasing options, so review them carefully and choose the best one for you to make your experience exciting and rewarding
Labels: automobiles , car leasing
