MOTORING: A real alternative to buying a vehicle, leasing allows you to drive a new car permanently.
A real alternative to buying a vehicle, leasing allows you to drive a new car permanently. A rental contract gives you the choice of a definitive purchase or a renewal by opting for a new vehicle. How to choose the best leasing contract for your car? We answer all your questions!
WHAT IS A CAR LEASING CONTRACT?
A car leasing contract is a type of contract in which a company or a person rents a vehicle, for a fixed period, in exchange for the payment of monthly rent. This is a real alternative to buying a car. Thus, car leasing proves to be a financially affordable solution that allows you to better control your budget.
At the end of the leasing contract, the lessee can choose between returning the vehicle or buying it . In the latter case, the price is determined in advance. The monthly payments then include a percentage of the cost of the vehicle and a charge for the use of the vehicle.
WHAT ARE THE DIFFERENT TYPES OF AUTO LEASING CONTRACT?
In the automotive market, there are two types of car leasing contracts: leasing with purchase option (LOA) and long-term leasing (LLD).
LEASING WITH PURCHASE OPTION (LOA)
Leasing with option to buy (LOA) is a type of contract designed for short-term use, 1 to 2 years. The lessee pays a monthly fee for the use of the car and is responsible for all repairs as well as necessary maintenance during the term of the contract. At the end of the latter, the lessee can return the vehicle or become its owner.
LONG-TERM LEASING (LDD)
While Long Term Leasing (LLD) is a type of contract intended for longer-term use, usually 2 to 5 years. Monthly payments often include a portion of the cost of the new vehicle, a charge for vehicle use, and an option to purchase. The tenant is responsible for minor repairs and regular maintenance, on the other hand, the lessor is responsible for major repairs. At the end of the contract, the lessee can choose to return the vehicle or buy it at a fixed price.
HOW TO CHOOSE THE BEST LEASING CONTRACT FOR YOUR CAR?
To choose the right rental contract, it is important to carefully study the market and the different offers made to you by the different leasing companies. Also, make sure that your payment capacity is stable enough to guarantee the payment of monthly rent until the end of the contract. Regarding the points to analyse before signing a car leasing contract, you can:
- calculate the total cost of the contract including monthly payments, entry fees and additional fees. Make sure you understand the conditions for returning and selling the car at the end of the contract;
- determine the duration of the rental and ensure that it suits your financial situation as well as your driving needs;
- check the annual mileage limits and make sure they match your intended use of the vehicle;
- fully understand maintenance and repair responsibilities and associated costs;
- check the contract modification options, such as changes in duration or mileage, and make sure that the contract options correspond to your future needs.
WHAT ARE THE CONDITIONS FOR SUBSCRIBING TO A CAR LEASING CONTRACT?
The conditions for entering into a car leasing contract may vary depending on the lessor, but the most common obligations include the following:
- to be of age ;
- have a good credit history to ensure that you are able to make regular monthly payments;
- have a stable source of income;
- provide a deposit to cover possible losses in the event of non-payment or damage to the vehicle.
WHAT ARE THE ADVANTAGES OF A CAR LEASING CONTRACT?
The leasing contract for your car has many advantages. Leasing can be a more affordable option for people who want to drive a newer vehicle without buying it. The monthly payments for an LLD are generally lower than the monthly payments for a car loan.
But also, the vast majority of leasing companies include maintenance and repair costs in the monthly rent. Finally, lessees do not have to worry about reselling the vehicle at the end of the contract, which can be advantageous for people who do not wish to take on this process.