Should You Buy Or Use 12 Month Car Leasing?

by : Shaun Parker

Car leasing is a great option for people that do not want the hassle of purchasing a vehicle, the expense of taking out a loan, or the effort of selling a car on after they have decided it is time to upgrade. Car leasing is particularly useful for people that want to change their car every few years and those that enjoy driving a new car around.

The fundamental difference between purchasing and leasing a car is that the ownership of the vehicle. In the case of car leasing the vehicle always remains the property of the person or company that leases it out. As opposed to purchasing where the vehicle is the property of the owner and they are responsible for all aspects of its use.

Because a car leasing vehicle always remains in the ownership of the person or company that leases it out there are a number of benefits. Firstly the vehicle is always the ownership of the person or company. This means that the person leasing it can return it the minute the contract expires. This means they do not have to worry about selling it on. They also do not have to worry about potential depreciation in value of a vehicle.

It is a well known fact that cars depreciate in value very quickly and if you lease a car this depreciation will not affect you. This may mean that those people that utilise car leasing can change cars very quickly and easily at the end of the contract. The down point is that the vehicle never becomes their own so there is no potential to make money on the sale.

Another important benefit of car leasing is that because the car never becomes the possession of the person that leases it, it can cost less than the cost of a car loan. As a result it may be possible to afford a better car than would initially be possible. This is because if you do not have to worry about paying off a loan the price per month of hiring a car can be much less. You can transfer this saving into improving the quality of the vehicle that you drive around in. Because the person leasing the vehicle does not have to worry about paying off a loan the cost of paying a monthly fee for leasing can be cheaper and more beneficial.

Because the person leasing the car never owns the vehicle it is possible that arrangements can be made for insurance and breakdown cover. This means that the monthly payments can be regulated and the person that leases the car will never be hit with unexpected payments if something was to go wrong with the car. This can make managing your budget much easier as you are never susceptible to unexpected costs. This can be extremely appealing to some people.

The downside to leasing is that you do not own the vehicle at the end of your contract. The money that you pay will go to the company that you lease your vehicle from and those payments can never be retrieved through resale. Car leasing contracts are typically held over 24 month contracts. 12 month car leasing and 36 month car leasing contracts are also common. Usually the longer the contract: the cheaper the monthly payment. So if you are considering this type of agreement think about whether a longer period would be possible as it could save you money.