People always wonder what the advantages of leasing a car versus buying one are. Here is a great article that explains why car companies are so eager to lease you a car, why the payment is often so much lower than buying and exactly how you, the consumer, can benefit from selecting a lease.
Have you ever wondered what happens to your leased car once you return it to the company? Do they lease it out again? Does it even matter?
Well, understanding what happens to the car once it is returned, gives you a greater understanding of how it benefits you. So what are the benefits of leasing and what should you be aware of before returning the car at the end of the lease?
What happens when the car is returned?
When you’re leasing new cars, typically what happens when you return them to the leasing company is they are re-sold for profit. That’s why you’ll find many companies have strict return policies.
The car is required to be in “as new” condition or you will pay a penalty. Of course, the companies aren’t unreasonable and they do expect some general signs of wear and tear to show. However, be aware your lease returned car will undergo a full inspection to determine whether any damages have incurred and what you might owe.
What can you do about it?
It’s often recommended that you have the car professionally cleaned prior to returning it. If it isn’t clean the company is going to bill you for it. You will probably find it’s more expensive to pay them than it is to clean it yourself.
Basically, they expect you to ensure the car is fit for re-sale by keeping it in excellent condition. If you don’t, the leasing company is going to charge you for the cost of repairs to ensure they still make a profit.
How can any of this benefit you?
So why should you care if the car you’re leasing is sold after you return it? It actually matters when it comes to choosing your next car.
You see, as the leasing company plans to sell a car (after you turn it in), they like to encourage you to select all the optional extras. Extras such as air conditioning and rear parking sensors add real value to the vehicle when they go to sell it to the next guy. This enables them to sell the car for more money – down the road.
Again, how exactly does this benefit you? You benefit because the cost of these optional extras are offered to you for very low prices. The car company makes it up when they sell the car in a few years – loaded with all the bells and whistles.
If you take a look at how much Motorpoint charges for its optional extras for example, you’ll see they are remarkably low. So, when you lease a car, not only are you enjoying low monthly payments while driving a completely new car, you are also getting the benefit of all or most of the luxury options for a very low price.
If you have been thinking of leasing a car, and you are contemplating one with lots of optional upgrades, now may be just the time to look into it.