The Different Options Of Car Leasing On Offer

The most popular way of car ownership will soon be leasing a car. The value of a car depreciates once it is bought. Because of this, the car models used by car leasing companies are the ones whose value can be retained for a long time just to ensure some profit comes from them. There are two major types of car for lease available to clients.

To begin with is the walk-away lease or otherwise called the closed-end lease. Here, all financial risks of the car are covered by the leasing company. The cost of extra miles covered that were not included in the contract or extreme damages incurred are the only charges payable by the client. What the leasing company terms as excessive damage is clearly stated and explained on the agreement documents. The main responsibility of the client is to take the vehicle back to the leasing company at the end of the contract in the best possible condition.

Several things are put into consideration in this type of lease whether it for a car or whether you need to lease a van. The first is that it is possible to estimate the miles that can be covered by a client using the leased car in one year. 12,000 miles is the most probable estimate. Also, the client is assumed to drive the car well and keep it in good condition. Thus, reckless and careless driving of the client are not even considered. The third aspect is the estimation of residual value of the leased vehicle. The estimated value of the car at the end of the lease period is what is termed as residual value. It is entirely determined by the way in which the car is driven and cared for by the client who leased it. Leasing companies are able to estimate the residual value of a car before leasing it out. In a case where the car is returned to the company being of less value than the residual value, the company covers all the financial responsibilities.

The second kind of lease is the open-end car lease. Here, the client is fully responsible for all the financial obligations and risks. Open end leases are more popular with business people and other commercial clients. The business covers the expenses incurred and benefits form having unlimited use of the vehicle thus the option. The mileage on open-end car leases is of no limit. These vehicles travel long distances for business assignments and it is almost impossible to predict how many miles they will cover over any period of time.

At the expiry of the contract in an open ended lease, the client will pay the difference between the estimated residual value and the actual vehicle value. However, it is common to find that the residual value in an open ended lease is less than that of the closed end lease. There are benefits in both situations and deciding on the type of car lease to go for depends on your reasons for needing a car.

For various types of vehicle leasing ? speak to Leasing Options. specialise in audi lease.

Source: http://www.eddyarticles.com/finance/the-different-options-of-car-leasing-on-offer/

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