How Personal Car Leasing Works

By: Shaun Parker

Car leasing is gaining in popularity for personal car users that are looking for alternatives to purchasing a vehicle. Car leasing has always been a very popular option for business users who want to fund their company car. This has been the case for a number of reasons. Firstly businesses are able to keep an eye on a tight budget by paying a monthly fee.

This also means that the business does not have to worry about paying the large down payments associated with purchasing and the responsibility for the vehicle remains with the company that lease it out. These benefits are of course transferable to personal car leasing customers. The other major benefit to business car leasing customers is that they often benefit from many tax advantages and as a result it has long been popular for businesses.

Perhaps as a result of the recent credit crunch in the UK people are turning to car leasing for their personal cars as unlike purchase the monthly fees are static and for people that struggle to get approved for a loan leasing is a good alternative. There are many advantages to personal car leasing for both the customer and the provider.

It is a finance option that enables the person that undertakes it to afford a vehicle that they wouldn't already be able to afford. Throughout the deal the vehicle remains the property of the leasing company and as a result the person that uses the vehicle does not have to take responsibility for selling it on when they want to move on they simply have to return the car and the keys and they are free to walk away.

This means that someone that is leasing a vehicle can easily change vehicles once their contract is up without having to go through the arduous process of selling a vehicle on. The major benefit of not owning the vehicle is that the person that utilises vehicle leasing does not have to worry about paying the vehicle down-payment that you have to pay when you are looking to purchase. This means that you can have free ownership of a vehicle without having to go into debt and take up a loan for it.

Car leasing is popular over a number of different time periods the length of the contracts are usually between 12, 24 and 36 months. The reason for this is that for the company that lease the vehicle it is beneficial to arrange the contract over a longer period of time. This means that the leasing company can be assured of an income for a vehicle over a longer period of time. The benefits of this to the company that lease the vehicle are obvious but there is also a benefit to the people that lease a vehicle.

The main benefit for longer term leasing is that it generally works out cheaper than leasing over a shorter period of time. Because the company can be assured that you will be paying out a set amount of money each month they can lower the monthly costs of their deals and offer you incentives. This means that the longer the term of the leasing contract the less money you will pay. This is a real benefit to many people and often their budget will stretch further and they will be able to afford a better vehicle.

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