What do you mean by leasing or rather we can say lease let's get into this in detail. Lease is a kind of agreement between the two parties and that agreement or bond could be anything related to land, personal property like car or real property like business lands, appartments, personal home etc. It is a kind of contract between the lessee and the lessor who agree on certain terms and condition. There are certain elements in such agreement which include the name of both the parties i.e., the seller and the buyer, the start date and the duration of the agreement, condition if the agreement gets terminated before or after the time, the basic condition about the use of land or any other thing on which the agreement is based on, insurance for the loss and its proper maintenance.
More often we have been hearing about the agreement of land which has worked really well be it for a business use or a commercial building or for any other purpose. A word tenancy is used when the lease is for a land and some kind of amount is paid monthly or on certain condition it could be annually too. Now in recent years there has been an advancement in business and leasing is been performed at almost everything but we will specially focus on auto business. Here vehicle leasing is done which is giving access of your vehicle for a fixed amount of time at some fixed amount of money under certain conditions.
This is generally offered by dealers as an alternative for purchasing and is been in a good demand in recent time. This gives profit to both buyer and seller as the buyer will not have to spend his entire savings for buying a vehicle and will not have to pay taxes and only a fixed amount after every month end, while the seller will still owe his vehicle and earn enough until he finds a permanent buyer of that vehicle. This kind of lease is only performed for a short duration of time maybe for a month or two.
The agreement is also made upon the number of miles a vehicle is permitted to run. Before handing the vehicle some deposits are taken by the seller from the buyer of the vehicle and this are security deposit which is handed by the landlord unless and until the vehicle is been returned in a good condition as it was earlier the other one is damage deposit which is the money the tenant has to pay if any kind of damage has been done to the vehicle and lastly the key money which the tenant has to pay for the vehicle he drove for certain amount of time.
Of all there are always some pros and cons for everything some of them are:
- No headache of paying any kind of down payment before buying a vehicle.
- Just fix this thing in mind that the vehicle was never yours so as to avoid getting hurt once it leaves you.
- No more worries about the insurance cost or any sort of maintenance that you might suffer is it was your personal vehicle.
- But before leasing a car or purchasing the same make sure you go through the cost benefits for example the monthly lease or the EMI, the free maintenance cost against the service cost while buying your personal vehicle.
- You have to keep in mind that after paying the EMI of the vehicle it’ll belong to you and you can sell it whenever you feel like but not in case of a lease.
- But if you are bored of the same vehicle than leasing is the best option as you can get a new car whenever you want.