Car leasing refers to a situation where an individual or a firm acquires a vehicle on a semi-permanent basis by paying the initial deposit which is followed by monthly installment for the agreed period. The leasing process begins by a person identifying the car of his liking then he goes ahead to sign the contract of ownership of the car. Ownership in car leasing is dual since the company is still involved in paying some of the maintenance cost of the vehicle. The amount to be paid as deposit and the monthly installments are determined by the different model of the car one wants to use. The contract runs for a specified period therefore after the stipulated time, and an individual wants to continue to use the vehicle he has to sign a new contract.
Car buying is a situation where an individual or a firm acquires a vehicle on a permanent basis. Car buying process involves identifying a vehicle of one’s liking then the person goes ahead to obtain it on a permanent basis. Once the vehicle has been acquired by the customer, he becomes fully responsible for the car. Here a person pays all the amount placed on the car at one time, and there are no other payments which follow after buying the car.
Benefits of car leasing
It is less expensive as compared to purchasing
Car leasing involves paying a deposit which is accompanied by monthly payments for a given period. The amount paid as deposit and installments is far much less compared to the amount an individual would have paid if he chooses to purchase the vehicle on a permanent basis. In car leasing the institution that hires take care of some of the cost, for example, the maintenance cost. Some of the cost that would have been incurred in the case of car buying are catered for by the dealership company, and this makes car leasing a less expensive option.
It allows customers to use different cars
Car Leasing offers a wide variety of automobiles for its consumers to use. Here one is not limited to one vehicle an individual is allowed to change the car at any particular point in time. What one needs to do to use a new vehicle is just to sign a new agreement with the dealership company. Then after signing the contract the person has to pay a new deposit which is then accompanied by the monthly payments. On the other hand in case a person has purchased a vehicle on a permanent basis he cannot be able to change the car without having to incur another high cost say for example buying another car.
It allows consumers to use the latest car models at reduced charges
Since leasing is less expensive and a customer is not fixed to using one car in case there is a new design which the customer likes and cannot afford to buy he can still use the vehicle by leasing. This is effective because one is allowed to use the latest model of his liking at low cost.in the case of car buying one would require massive amounts of money to purchase the most recent model of the vehicle.
According to me, I would go for car leasing because of the benefits accrued to it such as its cost effectiveness and also exposure to a wide variety of vehicles to use.