Car leasing is that method of acquiring a used or new car wherein you only pay for a portion of the car’s actual cost without having to pay for the price of the car in its entirety. This is a type of financing wherein you will pay only for the use of the car instead of the whole purchase price of the car. In comparison to taking out a car loan, in a car leasing, the amount you pay goes towards the use of the car and the finance charge. In car leasing you do not pay any principal amount of money which represents the value of the car because at the end of the lease you will not be owning the car but will simply be returning it. Whereas in a car loan, a portion of your money will be paying the principal value of the car and the finance charges because at the end of the term you will be owning the car.

Benefits of Car Leasing

One big advantage of car leasing is that you can get to use new cars at the end of each term of your car lease. At the end of the term of your car lease, you will simply be returning the car back to the leasing company and walk away without any more worries as to the depreciation of the car, and as to selling it to another person if you do not like using your car anymore. Another advantage of car leasing is that you may be able to use a brand new car that you in the first place may be unable to buy it because the price of the sale is beyond your budget. The monthly amortizations of a car lease is usually lesser than car loans, and in usual transactions of a car lease, the leasing company will just demand a small deposit for the use of their car.


Another benefit that you can have in car leasing is the opportunity to drive and use a brand new car every two to four years depending upon the terms of your lease. As you always drive and use brand new cars you will always benefit from the fuel economy and better performance capabilities that are usually found in using brand new models. During the time of your lease, you can also avail of the warranties which will cover the car normally during the lease period, and that may even include maintenance cost.

Changing Cars during a lease

Depending upon the terms and conditions of the lease agreement, you may also change a vehicle during a lease. Most lease agreements though will generally allow you to change cars without having yet complete the period of the lease as long as when you ask for early termination, you will be paying any necessary penalties that may be imposed upon you. Whenever you may need to switch cars during a lease just contact your leasing company and verify with your dealer the necessary cost for your early termination of your lease and the cost of the lease of the new car that you want to have a new lease.