Car Leasing 101: Things to Know before Leasing a Car

Car leasing ALD

What is Car Leasing?

A long term car rental agreement that allows you to borrow a brand new car for an extended period by paying monthly fees, car leasing agreements last for about 36 months but they may vary according to contract. At the end of every lease, you will have the option to either buy the car or return the vehicle.

Benefits of Car Leasing

1. Lower Monthly Payments – monthly repayments can be 30-60% lower than those on a personal car loan.

  • Shorter Terms – car leasing doesn’t require any long term commitment
  • GAP Insurance – Guaranteed Auto Insurance or GAP provides protection if your leased vehicle is damaged or stolen during the lease period; insurance companies base their calculations on the used value of the car
  • Lower Sales Tax – you can pay the sales tax of the car over a period of time
  • Tax Write- Off- when used for business purposes, leases are typically a tax write off. Write-offs helps to reduce your taxable income

2. New Cars More Often – company car leasing affords the opportunity to drive a brand new car every two to four years. This will allow you to experience advancements in newer car models.

3. Lower Tax Responsibility – don’t worry about road tax. You don’t have to check if you are up to-to date on tax payments, since it is mostly covered in the agreement for the duration of the lease period.

4. Minimal Maintenance Costs – if your car needs servicing or repair work, costs will be covered by the warranty.

Why Buy the Vehicle after Leasing?

What happen at the end of the lease? Another advantage of car leasing is that you can purchase the vehicle after the contract has concluded.  Some of the benefits of buying the car after leasing include:

  • Mileage – no mileage restrictions
  • Ownership – you own the car
  • Upkeep – you can maintain the car to your standards
  • Customise – you can customise to your heart’s content
  • Flexible Loan Termination – you can sell the car at anytime

If you are interested in company car leasing, ALD Automotive offers flexible finance schemes for businesses. Experienced in managing Private Label programmes for a number of manufacturers, we work in partnership with their respective dealer networks.

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