Car lease finance refers to financing of a car for a specific period of time. But, it is not similar to car renting. A car can be rented for few days or few hours, while, the leasing period of a car is minimum two years. Car lease finance enables a customer to make use of a car. At the same time, the consumer can enjoy the ownership of the car for a specific period of time.

Car lease finance involves a certain process. First, the lessee requires to negotiate the price of the car with its dealer. After negotiation, when the final price is decided, the dealer comes to sell the car to the leasing company. The dealer actually acts as a mediator between the lessee and the leasing company. And for this service, the dealer is offered with commission.

After signing the lease contract, the lessee is likely to keep up with all the car maintenance like a car owner. He or she requires to make monthly installments, maintain proper insurance, pay the taxes of the car, pay the fee for licensing, as well as maintain the car from any kind of damage! When, the contract ends, the lessee is supposed to give back the car to the leasing company. If the car has any damage apart from the normal wear and tear, the lessee is responsible for that and has to pay for  that as well.

Besides, the lessee may also require to pay for any mileage, if it exceeds the committed level which has been mentioned in the leasing contract. The lessee can also buy the car by paying additional amount of money, however, it is not advisable due to the equity value that is accompanied with the car. Thus, it is better that the lessee return it back instead buying!

This entry was posted on Friday, February 20th, 2009 at 9:24 am and is filed under Buying a Car. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.