Leasing and the Other Car Financing Methods
If you are planning to lease a car, there’s one question that most people ask which is should I rent, buy, or lease? These three leasing, renting, and buying are three different processes. Car leases whether it is a short term lease or a long term car lease in Singapore and purchasing are two methods of car financing. When it comes to leasing, you’re paying to drive the vehicle for a particular amount of time (about two to three years) while buying allows you to own the vehicle.
How Different Leasing Is from Other Financing Methods
Car leasing is always beneficial to drivers who like new vehicles or are not sure of the long-term vehicle needs or those who like to avoid the hassles of selling their cars by themselves. On the other hand, purchasing is better for those people who are more concerned about long-term payments and other costs. Renting a car is totally different from the first two mentioned. Rental expenses don’t have a definite formula. Instead its costs are largely determined by several set factors like the vehicle’s value in the market and its expected depreciation. Car rental is recommended only for short term use which is less than a year or even for just a couple of days.
Some Questions to Ask about Leasing
There are several questions to ask once you get into leasing. One of these is Do I want a closed-end or an open-end car lease deal? The open-end and closed-end deals are two types of car leasing agreements. The closed-end ones are known to be more beneficial for the lessee while the open-end lease deal is more protective of a leasing company.
Before you deal with the other aspects of car leasing, there’s an important aspect of car leasing that you have to know first: residual value. This is the car’s predicted value at the end of the lease. Car companies look into the history of the car’s make and model for them to predict the residual value of the car. The duration of the lease and the expected mileage are also considered. The residential value is predicted and not a sure thing.