EDU CENTER

WHAT IS LEASING

Concept of Car Leasing

For many years commercial or business leasing has been helping companies and corporations operate large fleets of vehicles, planes and machinery without extensive capital expenditures, now thanks to finance companies and auto manufacturers it is available to consumers and has become a very popular alternative to financing in the car market. And even though the concept of leasing has been around for some time it is still often misunderstood and even feared by some potential customers. Unfortunately some of the fears are justified “thanks” to unfair dealers that try to make money of off unsuspecting people. That is why it is important to do your due diligence and weigh all the pros and cons before making a decision.

Understanding leasing

It is vitally important to understand the process of leasing in order to avoid potential scams and get the wheels you want for a reasonable price. It is also important to look at other options such as financing to see if leasing is the right choice for you.

Confusion of leasing, renting and financing

The main root of confusion is in the terminology. Apartment renting, apartment leasing, car financing or rent-a-car services are all different types financing, although achieve a similar goal of using an asset (car, apartment) for a period of time in return for a monthly payment. Even though the terminology is similar the underlying concepts differ drastically. Do not draw any parallels or come to conclusions based of off experience from renting a car or leasing an apartment. Make sure to understand the peculiarities of car leasing and know the difference between a financed loan and a lease.

Benefits of leasing

Leasing has become increasingly popular over the last decade or so. Nearly a quarter of all new vehicles are leased. Lease ads and commercials are everywhere from local newspapers to prime time TV commercial slots. So why exactly is leasing so popular? There are several reasons, but first of all leasing allows you to save money. In comparison to a loan leasing makes cars much more affordable and allows you to choose a better ride for lower monthly payments. As we will discuss later this should not be your only consideration. You will need to look at different aspects before deciding on a lease.

With all the advantages of leasing it is a complicated process that requires a lot of preparation and analysis. This knowledge base was created to make sure that you are aware of all the benefits as well as hindrances of leasing.

To get this straight: Just like any business decision - do your research and make sure you understand the concept prior to even considering leasing as an option. Car leasing is not a perfect remedy for every person or household, it all depends on numerous factors such as your lifestyle, income, location, goals and many more.

Further we will discuss the process of car leasing and the absolute “must knows” before making the decision to sign a lease.