There are pros and cons to vehicle leasing, just like any other vehicle financing method. The end of lease price is usually agreed upon when the lease is signed.Typically a leasing company will have a minimum length of lease such as 24 months up-to 60 months. For the buyer, lease payments will usually be lower than payments on a car loan would be.
Similarly to the US automotive market, leasing a vehicle enables you to have access to a vehicle that you might otherwise be unable to afford if you were to finance the full value. The key difference in a lease is that after the primary term the vehicle has to either be returned to the leasing company or purchased for the residual value. Vehicle leasing or car leasing is the leasing of a motor vehicle for a fixed period of time at an agreed amount of money for the lease. Lease agreements usually specify how much wear on the vehicle is allowable, and the lessee may face a fee if that amount of wear has been exceeded.The actual lease payments are calculated in a very similar way to loan payments, but instead of an At the end of a lease's term, the lessee must either return the vehicle to or buy it from the owner. Vehicle leasing is available to both businesses and individuals in the UK, For the seller, leasing generates income from a vehicle the seller (or manufacturing corporation) still owns and will be able to lease again or sell through Leasing's average retail market penetration rate in the United States for new passenger vehicles reached an all-time record high of 26.5% in February 2014.The prevalence of leasing in the United States for Lease agreements typically stipulate an early termination fee and limit the number of miles a lessee can drive (for passenger cars, a common number is 10,000 miles per annum though the amount can be stipulated by the customer and can be 12,000 to 15,000 miles per year). A lessee does not have to worry about the future value of the vehicle, while a vehicle owner does. Vehicle leasing offers advantages to both buyers and sellers.
This is largely influenced by increasing company car tax for drivers (BIK) and taxable allowances for businesses being affected by vehicle emissions. Any sales tax is due only on each monthly payment, rather than immediately on the entire purchase price as in the case of a loan. For a business lessor there are tax advantages to be considered. Compared to a PCP method of finance, leasing is far more beneficial if you plan on changing your vehicle at the end of the initial contract, rather than taking ownership. Some consumers may prefer leasing as it allows them to simply return a car and select a new model when the lease expires, allowing a consumer to drive a new vehicle every few years without the responsibility of selling the old vehicle, or possible repair costs after expiry of the manufacturer's warranty. If the mileage allowance is exceeded, fees may apply. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring vehicles for business, without the usually needed cash outlay. This is almost the same as van hire but typically involves the finance or leasing company maintaining and being ultimately responsible for the vehicle. In recent years however the market has shifted and now personal contracts have the biggest market share. Dealers will typically allow a lessee to negotiate a higher mileage allowance, for a higher lease payment. Flexi-lease is when a person can lease a new vehicle for 3 months and then choose to hand the car/van back or indeed extend the lease for another period. In the UK the leasing market has historically been dominated by businesses and fleet customers. For company car users who opt out, a personal lease contract allows them to have a fixed monthly payment that's subsidised by their employer, but also allows for a more flexible choice of vehicles than a rigid company car policy. Recently a new view on leasing is that the market has grown for short term lease called 'flexi-lease'.
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