Car leasing allows you to use a new vehicle without having to buy it. You must be having a lot of questions regarding this. Here’s a few of those.
So what is Car Leasing? In simple words, it’s another form of acquiring a car. You cannot use the word purchase in this scenario, even though it gives you an option to buy once the lease contract has ended. But we don’t have to go too far on this. Take it as if you’re renting the vehicle for a set amount of time & mileage.
When it comes to car leasing, many of you get ambiguous about what questions you should ask the dealer. So let’s dive in;
How do I get started on Car Leasing?
When it’s about car leasing, there’re many different factors. First of all, you have to figure out how many miles you normally drive a year. If you say ten thousand miles a year, you would not 10K miles then you won’t purchase 12K miles a year unless you want a buffer. On the flip side, you don’t want to buy less mileage than what you would drive for the fact that there’ll be an overage charge in case you go over miles. This charge over the allotted amount is mostly predetermined while signing the contract. Normally, the average person drives from 12-15K miles a year.
Moreover, you also need to figure out how long you want to lease the vehicle. Most of the manufacturers have a 24-, 36-, 39- and some even offer a 48-month lease. Mileage & time determine what the residual value is for the car. To get the best residual value, you should get along with the 36 and 39-month lease. What is the residual value? It’s the amount of what the manufacturer thinks the vehicle will be worth at the end of the lease agreement. For sure, it’s positive as you only pay for what you use & not the entire amount of the vehicle.
What are the advantages of leasing over buying?
Leasing, too many, happens to be an interesting concept than buying. Consumers are trained over many years that leasing is a gimmick and buying is the only way to acquire something. Honestly, that’s not the case. Mostly, leasing is way better than buying. The way you can buy a car nowadays is very much different than what it used to be a decade ago. Ten years ago, you used to keep the vehicles until the wheels fell off, and then you headed on to buy again.
The average person keeps a car for 3-3.5 years now. So for obvious reasons, this is a huge change in the way we purchase. We buy new clothes & computers more often. Even mobile phone companies have switched to leasing the phone rather than purchasing. Inevitably, buying has benefits too, provided that you’re going to keep it a vehicle for years after the loan is paid off. But honestly, that doesn’t happen anymore.
If you buy instead car leasing Bahrain and pay for the 5-6 years, your car warranty is likely to run out of warranty. And now, you’ll you solely be responsible for any repair costs. In most cases, people will lease for only three years. If the average person drives 12K miles a year, it means you are under warranty during the entirety of your lease.