Car leasing is a rising trend, and more and more people are getting involved in this business to enjoy the benefits it brings. This agreement between the Hire Company and the buyer is about renting a new or used vehicle for an agreed time.
Car leasing can be categorized into two types:
1. Open-end lease:
This is also termed as commercial business leasing. In this type of lease, the leasing company takes no financial risks, but that is not a big problem for business because it can be expensed:
- The buyer is responsible for paying any difference between the actual market value and residual (lease-end value) at the end of the lease.
- The business lease allows for more exceptional and less-predictable annual mileage.
- The monthly payment amount for a business lease can be significantly high.
- The residual for an open-end lease is much lower than a closed-end lease.
2. Closed-end lease:
Closed-end or ‘’walk away’’ lease is the most common lease today. In this agreement, the buyer needs to return back your vehicle at the end of the lease. Additionally, people have no extra responsibilities except the excess mileage charges or excessive damage payment (if any).
- Fairly predictable mileage (average 12,000 miles annually) is the base of the closed-end lease.
- You also make sure that the vehicle will not be driven in an abusive condition, and that is why the value of the vehicle is somewhat predictable.
- If the leased car is worth more than the residual, the buyer gets two options. They can purchase a vehicle, keep it driving, or sell to make a profit.
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VIP Auto Leasing is a trendsetter that makes it possible to get your dream car on lease just sitting inside your room in front of your computer. The entire process of finding your dream vehicle to getting a quote is online, and you can get your desired car at your doorstep for free. From various luxurious vehicle deals to Cadillac & GMC auto leasing deals, you are just a few clicks away from having a brand new luxurious vehicle.