A car lease allows a person to drive a new car without ever having to pay in large amounts or taking out a loan. But a car lease only lets a person to drive the car only for a fixed period. The amount of payment is agreed upon between the leasing company and the lessee.
At the end of the lease, the lessee has to do either one of the two things. The first option is to return the car to the leasing company. The second option is to purchase the car at a residual value (the estimate of a car’s wholesale value at the end of the lease term). Typical lease terms usually go from two to four years.
Advantages of car leasing
There are many advantages of car leasing. For the lessee, the lease payments will certainly be lower than payments for a car loan, while not worrying about the car’s value in the future. As the lease for one car expires, he can choose for another car of a new model and make.
As for the lessor, he will be able to generate profits while he still owns the car, and then after the lease term he would either allow the car to be leased again, or sell it.
If you are planning to rent a car, there are a lot of car loan and lease calculators which will help you estimate what your car lease will actually cost depending on the lease term. While these car loans and lease calculators shouldn’t be completely relied on as ultimate determinants (meaning, do not take these calculators too seriously), at least they give you an idea on how much you are going to spend on a car lease.
Make sure that you have looked into the car’s model and manufacture’s suggested retail price (MSRP) and other things such as your negotiated selling price, downpayment, sales tax rates, lease term, the car’s value at the end of the lease and other fees, etc., so that you will have an idea how much are you going to pay monthly.
If you are using the car right now and have plans to buy it at the end of the lease, you also ought to know the car’s residual value as the lease expires – in case you have become attached to the car!
The following lists the most popular links of car loan and lease calculators. Their own instructions are pretty easy to follow, so rest assured that they will give you a fair idea about the monthly payments that you are going to make.