The Basics of Car Leasing

Definition of Car Leasing

Leasing a car or making a Lease Purchase can simply be defined as paying the cost of depreciation in the vehicle's overall value. Calculating the cost of depreciation can be done by calculating the car's original cost, minus the value of the car at the end of the lease contract divided by the number of years of useful life. Remember some cars have more depreciation as compared to other cars and thus are not the best choices for Contract Hire or Personal Contract Hire options. Examples of this are the cars that are of European or Japanese manufacturing that depreciates less than American cars. Keep in mind that your goal in car selection when leasing or making a Personal Contract Purchase or Contract Purchase is to get the car that has the least depreciation cost, because that way the lease amount will also be smaller. Of course familiarize yourself first with your dealer's Contract Hire Special Offers to get the sweetest deals.

After choosing from finance options like Contract Hire, Personal Contract Hire, Finance Lease etc, you should learn the following tips:

Car Leasing Tips

• When possible, lease or Hire Purchase only for a short period of time so you can fully make the most of the car warranty that is only effective in the vehicle's first couple of years.
• Consequently, do not sign Car Leasing contracts that are long term since the value of the car will have depreciated in time and car engine troubles also start appearing, so avoid this double-whammy of problems by avoiding long-term lease.
• As mentioned, go for European or Japanese-made cars for they generally depreciate at a lower rate than American cars.
• Finally be sure you are a good and responsible car user, since its your responsibility to take care of the car's maintenance and repairs, or else you will end up having to shell out more cash than you'd want to.

Follow these general tips and always ask your dealer for special offers that offer more benefits to you. Surely, an eager car lease dealer will be happy to convince you of the gains of Lease vs Buy.