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Your Essential Guide to Car Leasing

If the need for driving a car arises but you just do not have that huge sum of money to get one, then there is one thing that you can do as of the moment and that is car leasing. In a nutshell, car leasing is the process whereby you contact a leasing company for you to rent a car. Rather than giving a huge sum of money for the down payment of the car that you are buying, car leasing only requires you to pay small amounts of installments in order for you to drive a leased car. If you are planning to lease a car, make sure that you first read the following things about car leasing options.

What car leasing options will you be choosing from?

There are two primary car leasing options that you can choose from: open-end lease and closed-end lease. When it comes to the closed-end car leasing option, you will be returning your car after your lease term expires and that is it. However, it is a must that you make sure to keep up with the terms of use imposed by the leasing company if you do not want to pay additional charges for penalties.
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Take for example, regarding mileage, when the leasing company tells you to only cover a particular distance and you have exceeded a mile, then you will have to pay for that excess. Furthermore, upon returning your car, it will be further evaluated by the company because if they have found out that it has been worn down more than the level accepted in your contract, then you may have to pay for it.
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This option also allows you to be buying the car based on its residual value. It is important that the buyout price of your car will be mentioned in the contract when you have signed up for your lease.

Now, what makes the open-end car lease different from the above option? The open end car lease you must know is particularly offered for businesses. For this type of car leasing option, what you must expect is that the lessee will be paying for the amount difference in the value of the car that is determined before leasing it and its value based on market trends.

So, what benefits are there with car leasing?

To begin things, car leasing means that you will only be paying a minimal amount for your upfront cost. Most likely, the leasing company that you have chosen will let you pay the first month of your lease payment as well as some security deposit. This is very much different when you buy a car because you are required to pay a huge amount of money for the price of your car and you must also give down payment to the loan lender of your car.