Don’t take any drastic decision. There could be heavy losses to face unless proper planning is carried out prior to leasing a family car. First of all, it is necessary to understand the lingo. Every lease variant comes with a different lingo. There would be several key terms included that must be made cleared before proceeding. Having clear understanding of the key terms like money factor, mileage allotment, and residual allotment are crucial for the part.
Why to lease and not go for outright purchase option?
When you have a family to look after, expenses would naturally increase. It might not be easy to purchase a family vehicle. The valuation of a new car would be quite high. There would be one down payment included followed by certain monthly installments. The entire scenario could well create tremendous pressure on your earning affordability. While leasing, there is also a monthly fee required to be paid. However, it is much less in comparison to the EMI schemes for a new car purchase. When leasing a family car, there would be minimal down payment to be paid. Lease is a great way to enjoy family ride in a fabulous car that might be difficult to purchase.
Enjoying low maintenance cost
When leasing car, the maintenance cost goes down. Same cannot be said for purchasing a family vehicle. The lease period for a car would end typically prior to the requirement of major servicing. As a result, there tends to be much lower maintenance cost. Also, the vehicles to be leased would always come under actual factory warranty period. As a result, the person leasing the vehicle need not have to worry much about the repairing cost. After all, most of the troubleshooting scenarios would be covered under the warranty facility.
Enjoying the luxury of newer family cars every year or after gap of few years
This is the most interesting part. Leasing allows the option to enjoy driving different cars quite often. Say for example, a person has leased an Innova for 18 months. Once the lease ends, that same person plans on leasing a Fortuner. That would not be a big deal when leasing is the primary point of concern. Every few years, the dream to ride a new car for a considerable period would just become true. A short tip: leasing for 3 years would offer faster turnaround time when compared to the standard purchase cycle (usually 6 years). It is also easier to exit through the lease once the term gets over. Just be careful with the over-mileage part or some kind of excess damage charges. If those scenarios could be avoided, then there would never be a problem in ending the lease and move onto something newer at a later stage. Purchasing a family car would result in longer load period. There would be the situation of Upside Down. Often such scenarios lead to serious financial crisis.
Focus carefully on the total miles being allotted along with penalties for over-mileage
While leasing a vehicle and signing the agreement, there would be a clear mention of the total miles the user is allowed to drive annually (or for a number of days). If the mileage is exceeded, there would be a certain amount to be paid for every mile. Be careful with this part prior to taking a family car on lease.
Author bio: Amanda Torres is a blogger and car review expert. She has been associated with several car websites for the last 6 years. In this article for , she has highlighted the different aspects and benefits associated with car leasing.