What is leasing? The leasing contract provides for the car to be used by the lessee in exchange for regular payments to the lessor. Car leasing can be a good solution for people who like to change the car from time to time, but this option also has many disadvantages.
Car leasing, or car leasing – what is involved and who can use this option?
Leasing is a new solution, but it still has many loyal fans and it’s hardly surprising. When thinking about leasing a car, you must first find out what exactly this solution characterizes. How does leasing work?
Leasing is a type of civil law contract concluded between the financing party, i.e. the lessor, and the beneficiary, i.e. the lessee. On a legal level, this form may resemble a lease or rent, although there are of course many differences between them. The basic common feature that allows the above comparison to be used is the fact that the leasing option makes it possible to use the subject of the lease, i.e. a given car, without purchasing it. When using a car in leasing, the party using it is obliged to bear the costs specified in the contract for a specified period of time. Leasing fees are usually monthly.
Everyone who is interested in using a leased car on a daily basis, having the appropriate means, can take advantage of this solution. The advantage of leasing is that this option is available to both individual customers and individuals – companies, companies, local government units, etc. However, this is not all – the lease agreement may cover new cars as well as used cars. This applies to various types of vehicles: cars, trucks, off-road vehicles and even cars with trailers.
How does car leasing work in practice?
The mechanism of this service is extremely simple. The client goes to a financial institution (private company or bank), i.e. the lessor. This entity then purchases the vehicle from the vendor indicated by the customer, i.e. car dealership or second-hand shop for used cars. A contract is signed and the lessor hands over the vehicle to the customer, who becomes the lessee with the signature. Every month, the lessee makes payments for using the car to return the car to the lessor after the period provided for in the contract (usually 2-4 years).
Advantages and disadvantages of car leasing
Car leasing is a solution that (like any other) has its pros and cons. The unquestionable advantage of leasing is the fact that the lessee pays only for using the car, not the car itself. A plus is also the simplified procedure , which is less complicated compared to entering into a car loan agreement.
Further benefits associated with leasing include the option of obtaining discounts, which will occasionally appear on some models, which makes this option much cheaper. The vehicle issued by the seller is already registered and ready for use, it also has insurance paid by the lessor.
The disadvantages of this solution should include the need for own contribution, which is usually around 10-20% of the car’s value . Without this lessor, it would not be worth buying a car for a customer. Experienced drivers, unfortunately, will not take advantage of the insurance discount when leasing the car, as the lessor insures the car. After a given time, pre-emptive rights may apply, but the terms are often unattractive. The lessee may not make any permanent changes to the car. Suspension lowering or LPG installation are excluded. It should also be taken into account that in the absence of regular fees the car will be quickly taken away.