Car leasing is not a new phenomenon in the Philippines. There are numerous companies offering services to consumers. Leasing can potentially make life easier for those looking to get behind the wheel of an automobile since it’s not as costly to lease a car as compared to outright owning it.
For those of you who are looking for an alternative to car ownership, let’s first go over the advantages and disadvantages of leasing a car for a long period of time. There are a few different types of entities that offer you leasing opportunities. Manufacturers like Toyota and Nissan will likely offer you a range of units to choose from in order to lease for a long period of time. Other companies also specialize in short-term rentals and usually last a few days to a month. You can also lease from private owners, which has its own set of nuances.
It’s less expensive on a monthly basis. Compared to financing, leasing a car is essentially borrowing for a price. As the lessee, you’re supposed to pay a recurring fee as per your contract’s stipulation.
New car! If you can opt for a good lease deal, the car that you’ll be given will be a brand new – or close to brand new – unit. Once your contract’s up, you can renew your lease with a new unit or extend your contract if the lessor allows it.
Buy the leased unit. Chances are, the contract will state that you can buy the car that you have leased at a substantially lowered price. In order to transfer the ownership to you, the manufacturer can either take back the unit you’ve grown accustomed to, or you can renew your contract and return the car for something new.
The period can be short-term. You don’t need to commit to a car for the rest of its life. Eventually, you’ll have to return the unit to its rightful owner. If you’re not that sentimental, then it’s on to the next one. Also if you just need the car for a specific task for a short period, after the term is up, you wouldn’t have to worry about a machine anymore.
Variety is the spice of life. After you’ve paid your dues, and your contract is up, a new car may be available for you to lease depending on the company you transact with.
You don’t have to go through the hassle of selling it. When the lease contract is over, just return the car, and have the owner sort out what to do with a unit they weren’t able to use. Either that or, the company that you borrowed from tasked to find a buyer or a new lessee.
It’s not actually your car. There is a certain certainty when it comes to owning your car. Whenever people ask you how you arrived, you can’t necessarily say it’s yours, but it’s yours for a time only. You can take pride in owning a car when you buy it outright.
You’re limited to the dealership or accredited service centers. It’s not your car, so the owners get to decide where to bring the car when a service is needed.
You could be the one paying for maintenance. For units that are loaned out for a long period of time, it is possible that the maintenance schedule will come into play. At this point, it depends on what the contract states. You could be responsible for paying for the service, or your fee already accounts for maintenance and parts. Better check the fine print.
Repairs are paid by you. If you happen to get into a minor or major accident, things will pan out the same way. The unit that you will be leased will most likely be insured, but there could be penalties that accompany this. Also, if the owner would prefer you have the unit repaired at the dealership, the repair cost could be substantial.
Don’t go too far. Depending on your contract, the owner of the car would want his asset to keep its odometer from advancing too much. The owner might give you a distance cap, which is no fun especially if you like going on road trips.
No modification. Since it’s not your car, you cannot do as you please, so that means you should keep the unit as pristine and spotless as possible. You can’t install an aftermarket exhaust, or new body kits, or new wheels. The owner has not given you permission to.
No exit. While it could be easy to get into a contract, provided you pass the background checks, getting out of a contract is not cut and dry. It’ll be a lengthy process that may even cost you an extra fee to cancel the lease.
Do your research, and make sure that you’re getting the best deal.
Know that the car is not yours, but know that this can also play to your advantage since you’re not burdened with the hassle of what happens to the unit after you use it.
There’s always next contract, so you can look forward to your next unit without figuring out how to dispose of the old.
Be careful with the car, and don’t be irresponsible.
If it’s a long term lease, it’s essentially a financing plan with lower rates and now ownership, unless you choose to buy the unit towards the end of the contract period. If you’re leasing the unit of another and not a brand’s such as through Toyota or Nissan, you might be able to have the same protections that big companies can afford.
When you lease, you still won’t own the unit outright, and that can be a sore spot for individuals that enjoy the thought of owning a car. At the end of the day, this is another way of looking at the product cycle when it comes to cars. At the start of the cycle, a unit rolls off the showroom floor for a price, then depreciation begins to set in after it’s used, and the car is sold off at a depreciated price to the next owner. A leased unit rolls off the lot for a price, is used by the lessee, and then returned to the lessor, or bought by the lessee. It’s essentially the same, with extra complexity and paperwork woven in, though the latter can appear more affordable it all depends on how you utilize the leasing system.