Car Leasing-A Basic Insight

Car Leasing is a concept that is relatively new to the Indian sub-continent, but has been there for a very long time in the western countries. When it comes to buying a car we either go for paying it upfront or getting it financed for which we pay monthly installments. Now this is where Car Leasing came to existence because of the loopholes in the current system.

·         If a car is bought for upfront cash you get the complete ownership of the car. After 2 or 3 years, there is a new car with upgraded technology. In this scenario, it is not easy for a person to switch to a new car as he/she has just bought a car one or two years back. Switching to new car will mean extensive paper-work involved in selling the old car and buying a new one, time spent in documentation procedure and in finding a buyer for the old car willing to pay the demand amount. The complete process is time and process consuming.

·         If a car is financed then along with the interest and taxes, the installments get more than the principle price of the car. Generally the installments are on a monthly basis, calculated on the grounds of your income along with the price of the car or the amount of loan money which you have opted for.

Now we are well versed with these two concepts. The basic question is What Is Car Leasing? Why should one go for car leasing? What are the benefits of Car leasing?

a)      What Is Car Leasing?

          It is more like renting a car where you pay monthly rent for the car along with the down payment that you pay at the starting of the lease period, which is generally around a span of 2-3 years. So you can return the car whenever you feel like switching to a new car and you don’t have to spend large chunks of your money again.

b)      Why should one go for Car Leasing?

Car Leasing can be preferred in case you tend to change your car on a frequent basis and do not prefer spending much on the car every time. Car lease contracts are bound for a specific time period only so you can switch to a new car as its contract ends. For that you need to pay a gap amount as a down payment at the time of switching a new car but that still will be comparatively lesser than the amount needed to pay at the time of cash upfront payment or at the time of loaning the car.

c)       Benefits of Car leasing

Car Leasing has an extensive set of benefits as compared to loan. Majorly the buyers who are going to apply for a car loan take an interest in leasing too as they get to choose the better option. The monthly installments in Car Lease are cheaper than the loan installments. The owner of the car i.e. the company from where you leased the car covers the warranty so the maintenance cost is almost nothing. The car company bears the depreciation in the car value. Depreciation is the decrease in the value of the car as its running and time on road increases.

 Avis India is the front runner for Car leasing companies in India and is currently operating with a fleet of 2500 cars. Its parent company is Avis International that is operating in this segment as its core business, and hence has a concrete and trusted base behind its operations. Vehicle leasing companies in India have seen a commendable rise with time but the most important factor is the trust in the genuine service of a company, plus many times companies hide additional amount that they charge and are mentioned in small letters somewhere near the bottom of the contract where one can’t easily view them. Avis India so far is maintaining customer satisfaction levels and no as such case in this regard has been observed. The quality they offer speaks highly of the company ethics and how much they can be trusted.