Car leasing is a popular option for those who want to drive a new vehicle without committing to long-term ownership.
1. Closed-End Leases (Car Leasing)
- Description: The most common car leasing option.
- Terms: Set lease term (typically 2-4 years) and mileage limit.
- Advantages:
- Benefit from the vehicle’s residual value.
- Lower monthly payments compared to buying.
- Disadvantages:
- Restrictions on modifications and mileage.
- You don’t own the vehicle at the end of the lease.
2. Open-End Leases
- Description: Less common, higher risk.
- Residual Value: Set in the lease agreement.
- Risk: Lessee pays the difference if car sells at auction below residual value.
- Advantages:
- Potential surplus payment if car sells above residual value.
- Disadvantages:
- Lessee pays the difference if car sells below residual value.
3. Single-Pay Leases
- Description: Pay the entire lease amount upfront.
- Advantages:
- No monthly payments.
- Potential cost savings.
- Considerations: Evaluate your financial situation.
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