Car Lease About
The first thing you need to understand about car lease is that it’s not a loan. Getting a loan means that you can actually purchase something. Leasing is actually a rental agreement. If you make a loan for a car and you finish all the payments on the loan, you remain with the car. On the other hand, when you finish all payments and reach the end of the contract, you end up owning nothing.
So if you end up with nothing at the end of the lease, than who should lease? Leasing was created with the purpose of offering vehicles for business use while providing an economical way to do so. Nowadays it has become a way for the average individual to drive around much more than they can afford. 75% of all Mercedes, BMW’s or Lexus’s you see around are leased.
If you have a small business of your own, or plan on using the vehicle for business purposes only, than yes, leasing may be the best thing for you. However, if you are one of the many that cannot deduct lease fees from taxes than leasing would be a bad idea. If you put all the payments head to head you may come to realize that buying a car might cost you less than leasing for one and ending up without it in the end.
Dealers will tell you every time that leasing is a good idea and the fact that you will be driving a new car non stop. The reality is completely different. First of all you have all the responsibilities of owning a car and no advantage. You don’t have a car title to show for since until the end of the lease, the leasing company holds it, yet you are the one doing all the maintenance, repairs and insurance cover. It limits the use of your car dramatically because if you dare cross over the 15000 mile limit than you might end up paying 15 cents for each extra mile (if that’s not ripping off, than what is?). The only financial advantage of a car lease is that you don’t have to pay the sale sates tax more than once per month with the monthly lees fees.
Before entering a leasing contract you should read all the clauses carefully because you may be surprised. Your contract dictates the condition the car must be in when you return it to the dealership. Any kind of abuse like dents and scratches must be professionally repaired. Whatever broken knobs and other accessories must be changed, while the wear and tear should be kept to a minimum. Keep in mind that you will be charged for every imperfection that the car has. If you were to own the car no one could force you to repair the car, unless you feel is necessary.
Another great danger posed by leasing is the early contract termination. Representatives and dealers will tell you that ending a car lease is not a problem and that you’re free to return the car whenever you feel like it. Don’t believe a word they say, since their promises fly away like the wind since you don’t have anything of the sort written on your contract. In reality breaking a lease can be extremely expensive and if not done correctly, could leave you with no car, no money, and deeply scar your credit history. The best way is to find someone that is willing to assume your lease so that you can transfer the lease and give away the responsibility.
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