Car Lease, Inc. - Leasing

What is Leasing

There is nothing mysterious about leasing. It is merely using the lessor's property for an agreed-upon time period for an agreed-to schedule of payments. People have leased homes and apartments for years.

Most people who buy a new car, particularly in these days of high car costs, do so with money they have leased from a financial institution, such as a bank.

But leasing a car is different from buying a car. When you buy a car, you buy the total car, and, if you keep it until it's paid for, you have some equity. Usually, that equity is used as a part of the down payment to buy a new car.

In leasing a car, you pay only for that portion of it you use or consume (depreciation) plus interest and a service fee. In most cases, it is therefore, cheaper to lease rather than buy a new car, particularly since leasing companies often obtain lower interest rates and get cars cheaper than the individual.

Buying a new car is simple. You can make certain decisions with respect to the make, model, style, color and equipment and arrange financing, if necessary. Leasing is not really any more complicated.

Why do people lease

There are several reasons why more and more people are leasing cars. Leasing can lower your monthly payment, eliminate some ownership problems, provide you with one monthly invoice, and give you access to a knowledgeable professional. One of the best reasons for an individual to lease rather than buy is that the security deposit on a lease car is usually much less than a down payment needed to purchase the same car. The money tied up in a down payment, which is usually 10 to 20 percent of the purchase price, can be invested or used to purchase something else.

Leasing also can eliminate some ownership problems, such as the buying and selling process or shopping around for the best deal. When you lease, you can step from one car to another at a set time.

Leases can be written to cover taxes, titling, registration, substitute transportation, insurance, and maintenance costs, thus eliminating several payments in favor of one monthly fixed cost.

Leasing can give you the access to a professional's knowledge and experience regarding which makes and models, colors and options, will most likely keep pace with the marketplace when it comes time to lease your next car. This can be an important factor in keeping monthly payments low.

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