Top Considerations before Choosing a Vehicle on Lease Term

Leasing a car is quite different from buying a new one. If you’re about to lease a new car, you must understand the basics of car leasing.

What Is a Car Lease?

The vehicle lease services are where you have to pay a fixed amount to your leasing company for the right to drive your leased car. Your monthly payments decided by the lease company before you sign the lease agreement. As you sign the deal, you can simply get to drive the car for a specified period of time, usually two or three years.

What at the End of the Leasing Agreement?

There are two types of vehicle leasing; the first one is personal car hire agreement (PCH) where you need to return the car at the end of the lease term.

The second option is personal contract purchase (PCP) that will be a cheaper option for those who want to own car at the end of lease term.

How to Deal If a Leased Car Needs To Be Repaired?

In case the car has been damaged in an accident during the lease term, then you would need not to pay for damages, as all are covered in your insurance. The insurance offered is the responsibility of service provider who has offered you vehicle on the lease.

If a leased vehicle gets stolen or written off, there you’ve to face a shortfall in the outstanding finance amount. In such case, only an optional GAP insurance would cover the loss and would allow you to replace the vehicle without any loss or burden.

What You Need to Look for?

You should know about the penalties for driving over your agreed mileage limit, as this can be expensive for you. When you get a vehicle on the lease, there is no option to buy it at the end of the agreement. So, it’s better to ask your lease provider to provide full information on car insurance, maintenance, tax amount, interest amount, monthly rental and penalties.

Bottom Line

Hiring a car or vehicle on lease enables you to break down the actual cost of that vehicle into manageable monthly payments. This is definitely a good option for those who’re looking for a new car in budget amount. There are so many options available on the market that you can see through the net. Also, it is advised to compare them carefully to get the best choice.