Leasing a Car- FAQ
Leasing a car has become a very popular option. Instead of buying, you can lease a car and pay regular rentals on it. It becomes a cost-effective option for those who need a car but do not have enough funds to buy it.
Leasing a car would not result in the transfer of ownership of the car. If you need a car for a very long time, Buying would be the best option. But for the time being, you can lease a car and make use of the flexible policies that come with it.
● Why should you lease a car?
Leasing a car is a very cost-effective option. The cost to lease a car is much lesser than the cost involved in buying one. Also, leasing a car would need you to pay little or no down payments depending on the service provider you choose.
Also, the monthly payments towards your car lease are calculated by factoring in expenses like depreciation. You generally pay only these expenses when you lease a car. Also, leasing a car gives you the flexibility to change your vehicle frequently.
With a car lease, you never have to take the pain of selling the vehicle. Also, this would not require you to borrow money or take a loan from the bank.
● What are the options available if I decide to lease a car?
Various car leasing companies have different curated offers for different needs. You can opt for any one depending on your budget and needs. Also, various factors would decide the company you choose to go with.
The availability of return policy
Availability of Lease Extension
Availability of the purchase option in case you want to keep the car
Renewing of lease
Availability of trading off the car lease with someone else
You should lease a car keeping these lease features on your radar.
● Will I get a new car if I decide to lease it?
Yes, you might get a new car on a lease, depending on your provider. Various car companies are now providing brand new cars on lease. You can lease a new car for 6-60 months, depending on your requirements. Car companies do so to reduce inventories and stock surplus lying with them. Some companies do not even take any down payments for these vehicles.
● Can I buy the same car which I had taken on a lease?
Yes, you can buy the same car once your lease ends. This option comes in handy if you don't want to get rid of the car you had taken on lease. Also, buying a car which you had leased from a lessor will bring down your costs to a great extent.
The amount at which you can buy the leased car is pre-decided and presented to you when signing the car lease. You can then arrange the necessary financing for purchasing the car. Before buying, make the calculations on the amount you will have to pay and the amount you are already paying towards your lease.
● Can I exchange the car which I take on a lease?
Yes, you can exchange a car on lease to get a new car on lease. This would depend on the clauses of your leasing contract. This exchange would come at a cost. The cost would be decided by considering various factors like the early termination of the previous lease, cost of the new vehicle, paperwork and legal charges, etc. Study these factors carefully before making an exchange decision.
● What are the benefits of leasing a car?
Leasing a car comes with multiple benefits. Some of these benefits are:
This option is easier on your pocket as you have to pay a very less or no down payment when you lease a car.
The car rent is much lower than the EMI payments, which have to be made when you buy a new car.
You can exchange the old lease and get a new car in return. This way you can use different cars.
You can return your vehicle with ease if you don't need it. The residual expenses have to be paid off before you close the lease.
The car's future value won't affect you in any way as you do not have to bear the burden of selling the car.
You can also buy the leased car after the expiration of the lease.
You don't have to take loans as paying the amount towards your loan is not that expensive.
Also, various significant expenses like the maintenance of the vehicle, etc. are borne by the lessor.
● If I lease a car, who will bear the maintenance and the insurance charges attached to a car?
In most cases, the lessor bears the maintenance and insurance expenses associated with a car on lease. This brings down the cost of the lease payments. Also, car insurances have to be renewed from time to time. This is taken care of by the lessor.
● What happens in case the car I get on lease gets damaged?
The lessee would have to pay the lessor the amount required for damage control. Some companies charge a surprisingly high amount because of excessive wear and tear in case of a damaged car. It is better to keep your car safe.
Returning the car in a stable condition is mandatory. The lessee pays residual damages.
● Is leasing a car a cost-efficient option?
It has two sides to it. Leasing a car comes with a rent which is much lower than EMIs charged when you purchase a car. Also, the primary insurance and maintenance charges are borne by the lessor, which makes it an attractive offer.
However, in case of any damages, you have to pay a heavy price. Also, early termination charges of the lease are quite high. At the end of the lease, the ownership of it is not passed on to you.
● Can I opt-out of a car lease?
Yes, you can opt-out of a car lease. Early termination charges would be applicable in case you decide to lease a car.
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