Car leasing is a service whereby a company or an individual (the lessee) enter into an agreement with the lessor by which the lessee is provided with a vehicle spec’d to his or her requirements. It allows customers to acquire their favourite cars which are otherwise beyond their budgets. The lessee would thereby agree to pay a monthly fee for the term of the lease (typically 5 years but it can also be 3, 4 or even 6 years) and which would include:
At the end of the lease, the lessee has various options – to extend the lease, change to a new vehicle under a new lease contract, or purchase the vehicle at a price that is agreed by both the lessor and the lessee.
In other words, a car lease is like renting. The lessee doesn’t own the vehicle and hence is not subject to the yearly depreciation and other associated costs. Leasing provides the customer the possibility to drive the latest models at a monthly fee without having to resell the vehicle at regular intervals.
Car leasing also provides tax benefits for companies whereby specific amounts can be deducted from the tax return. Prices vary depending on the model and specifications required by the lessee. It is crucial to compare the features of various lease options available and select a lease that best suits your requirement.