Car leasing may be a good option for those individuals or companies that want to have a new car but want to save some of the money it costs in full car ownership. Car leasing is a way to rent a car over a specified period of time. The car is not owned by the person or company leasing it at any point and at the end of the lease, the car is returned to the dealership or the car leasing company.

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.

First of all it’s best not to announce when shopping for a car that leasing is your preference. Why not leave all options on the table. First of all, who knows, the standard car payment purchase plans may be offered to you. Next you are in a better negotiating position overall to get the best deal. It’s always best to keep your cards close to your chest . Be careful that family members, along for the ride and purchase, do not let out privileged information inadvertently . Industry consultant Winnipeg based William Simpson pointed out that the automotive industry sharp salespeople will always be on the lookout for “Radio Moscow”.

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.