The benefits gained from leased cars are:-

• A brand new car every two or three years.
• Being able to afford more expensive models, normally outside your personal financial means.
• The avoidance of having to sell the car and deal with advertising, customers, auctions, etc.
• Paying a lower monthly figure than with a loan that can also include maintenance and servicing costs.

The only time you will have problems is if you are not fully conversant with the idea and terms behind leasing, or if your driving style is not suited.

Pitfalls of leasing are few, but for those who are likely to wish to end the contract early, drive more than 15,000 miles each year, feel the need to customize or alter your car, or just have the need to actually own your car, then perhaps leasing is not for you.

With any financial venture, the best way of getting a good car lease deal is to know what you are looking for and how much you can afford. Anyone who offering finance normally expects for some form of deposit, this is traditionally ten per cent but you can obtain better rates if you are able to put more money up front.

You could also try and arrange to defer some of the payment until the end of the contract; some lenders may offer favourable conditions in these instances. Verify your cancellation rights as well; if you end the contract prematurely there could be extra costs.

Dealers might also give you a better rate depending on the time you take the car over, or shorter-term options or lower than average mileage may provide you cheaper monthly payments. Proving your reliability as a driver might also be in your favour as once the agreement ends the dealer will be looking to sell the car and will want it returned in as near the initial condition as possible.

Research the competition on the internet and see what other dealerships are providing, by getting a good idea about the APR (annual percentage rate) you can make sure you are being offered the best car leasing deal. Always be prepared to haggle, if you can’t reduce the price, see what extras might be included, for example free servicing for a certain number of years, the accessories like floor mats and seat covers or containers full tank of fuel.

First off, renting lets people use a car for a short period. The rates are determined by a rental company and can range from daily to weekly charges. On the other hand, leasing is a financing option. This lets people drive and pay for a car that they want much like a loan.

Renting is relatively easier than leasing. Credit ratings, income and debt are all examined before being able to lease a vehicle. This often reflects on your credit report. Renting meanwhile is not much fickle when it comes to customers.

A rented car is easier to return and replace than a leased one. Certain terms often prevents a lessee to return the vehicle especially without penalties. A lease contract is also long-term and more difficult to opt out than a rent.

Car rental companies do not have much variety in the cars that they offer than car leasing companies. Your choice of rented cars is much more limited.

Rented ones are usually covered with basic insurance but you have to agree to pay for fuel and not damage the vehicle. Warranties can be included in a leasing agreement which covers for maintenance but not gas. Any damage to the vehicle must be paid for by the lessee.

As you may know understand, car leasing and car renting are very much different from each other.

Of course, we all know that the world of auto sales is a highly competitive one. We won’t insult the hard-working members of that profession by lumping them all together, but sadly, there are some very shady characters out there that ruin the reputations of the rest, and give us our impressions and stereotypes about sleazy car sales people.

It is also no secret that car sales people make the bulk of their commissions on financing. This can mean big money to a sales person, so they will push the options that will be on the brink of what is most useful to the customer, to the furthest edge of what makes them the largest commission.

But where some sales people cross the line, in regards to warranties, is when they propagate the myth that an extended warranty is something that can only be purchased from the dealer, and only at the time you make the initial purchase. This is completely false.

While you can certainly make that purchase, it may not be the wisest. The costs, when bundled into your financing package for the new car, may be considerably more than if you were to shop for the extended warranty independently. A dealer usually works with only one finance company and one warranty provider, so there is no comparison shopping you can do here.

The other downside to buying an extended warranty at the time of purchase is that your extended warranty may kick in right away – so you will be double covered. If your manufacturer offers a three year warranty, and you purchase an additional five year extended warranty, you will be covered for a total of five years, not eight.

So be aware when you go in to make that purchase of a new or used car from a dealership. There is a convenience factor to purchasing the auto warranty at that time, and yes, the costs will be rolled into your financing, so you won’t have to make a large payment. But it could end up costing you, further down the road.

There is a deposit associated with car leasing. This initial deposit is non-refundable and is simply a way for the leasing company to protect themselves. After the initial deposit, the person or company leasing the car will pay a monthly amount that has been agreed upon by both the individual and the car leasing company. The term of the lease is usually approximately two or three years however, it is possible to lease a car for a year or even less.

Leasing a car is not the same as taking out a car loan. The largest payment that is required is the initial deposit and that is usually only about one, two or three months total of the monthly lease payments. This allows the person or company leasing to keep their money in a high interest bank account and to simply make the lease payments as part of their monthly living expenses. This can be especially useful to companies that want to lease a company vehicle. They can then take the payments out of operational expenses rather than out of capital expenses.

Because the lease will usually be less than three years, the car will always be covered under warranty and it will not require an MOT. This means that the person or company leasing the car will not need to worry about major repairs. The only things the person leasing the car needs to worry about are routine services such as oil changes and consumable items such as tires. These items are not usually a great expense during the first three years.

Another benefit to car leasing is that a person or company may change their cars every few years. This is beneficial for many reasons. The first reason being that the individual or company will not need to worry about their car breaking down all the time as it gets older and becoming more of a burden rather than an asset. Another benefit to leasing is that the individual or company will get a new car every two or three years.

Changing cars every few years is made so simple by car leasing. It is not necessary to try and sell the car before another car is obtained. Instead, one car is simply given back to the leasing company in exchange for a different car. It can be lots of fun to try out different cars all the time and will save the hassle of major repairs and grief.

Do your homework first and foremost. As a buyer or lessee you have a right to know the capitalized or “cap” cost. There is no way to calculate your “APR” or “Annual Purchase Rate” without this magic number. Insist that the vital cap cost be given and divulged to you. If not – then in this day and age there are plenty of other automotive dealers to buy or lease a vehicle from.

Many leased vehicle buyers are more than happy with their vehicle even after the covered time period. The car started new. You know its history and maintenance schedule and routine and any accident history since you are the original owner and driver. It’s not as if you had even purchased a one year vehicle from a dealership – which was most likely a drive rental vehicle and most likely will not have such a clear and known record. You may well decide to extend your lease period. Ask upfront about any lease extension terms, rates and additional add on costs or fees. You may not want to lock yourself in at the beginning for a very long term lease – yet if you are happy with the vehicle – then by extending the lease period you may find it a very easy and nice way to reduce your monthly payments, while driving a known and reliable vehicle that you still enjoy.

Lastly examine and take into account any assumptions that you may currently have of your driving habits. Not only with a newer or more reliable vehicle may you drive more or motor vacations that you may not of considered in the past but also there may be additional drivers that come onto the scene who would of not of been included before. Spouses or kids with driver licenses may well add miles to the vehicle on a regular ongoing basis that may not of been included in your or the leasing agent’s quick calculations when the whole deal is set up. Mileage over a given threshold may invoke not unsubstantial costs, fees and penalties.

In the end in shopping for a new vehicle – be it purchased outright, be bought on payments or leased it is always best to do careful and thorough homework and never be afraid to ask questions. Purchasing a vehicle is always a case of buyer beware and purchaser err on the side of caution.

Take a look at some of the benefits of car leasing as opposed to outright purchase of a brand new vehicle:

No Major Upfront Costs with Car Leasing

Among the major benefits of leasing a car in the UK is that there is no major expenditure while acquiring a new car; typically all that is required is a small initial advance that is typically about 3 times the monthly lease amount. These smaller upfront costs mean businesses can maintain their profit margins while still experiencing the benefits of a new vehicle for the duration of the lease.

Fixed Interest Car Leasing Plans

Almost all car leases are available on a fixed payment basis. This means that irrespective of any movement in bank base rates, the monthly lease payments always remain constant and unchanged. Among other things, this allows people who lease cars to maintain accurate budgeting for at least the duration of the car leasing contract.

Car Leasing Offers an Alternative Funding Source

Customers who take advantage of leasing to acquire new vehicles get to conserve their available capital and protect their primary funding sources including loans and overdraft facilities. This gives customers the unprecedented advantage of having extra available income without using up their external resources, which will still be available for them at a future date should the need arise.

UK Car Leasing is Tax Deductible

All payments that a business makes under a UK car leasing agreement are regarded as operating expenditure. Hence, these payments can lower the taxable profit on the business by as much as one hundred percent of the total payable rental.

Reduced Time Spent On Administration & Maintenance

With a ‘Contract Hire’ or a fully maintained operating lease, customers have the option to have the contract fully maintained. This means that all routine services including overnight service, manufacture recalls, service reminders as well as tyre replacements and all other items that may need to be replaced during the lifetime of the contract remains the responsibility of the leasing company. This can dramatically reduce the time spent, and expenditure, on the upkeep of the vehicles.

Car Leasing Offers you the Best of the Best

Sure you would like to drive around in the swankiest model available but you don’t think that you would ever be able to save enough to actually own any of the latest models of cars. Purchasing a cheaper car is an option, however car leasing offers you the ability to drive around in any of the latest models of your choosing without having to over-extend yourself financially or worry about being head over heels in debt. Charges are incurred only in case the pre-agreed mileage allowance is exceeded or if there is excessive wear and tear on the vehicle.

The internet is proving the ideal environment for the car leasing market. And all the risk is taken by the leasing company.