Car Lease

1. There is no need to make a down payment when you lease a car.

1. The lease term may vary from two to five years, depending on your chosen leasing contract.

Features and Benefits of Leasing a Car

Some of the notable features and benefits of leasing a car are as follows:

1. Maintenance Benefits: Vehicle owners typically spend a fortune on maintenance costs. When you lease a vehicle, the maintenance of the vehicle is done by the company that owns the vehicle. You don't have to spend anything extra on regular vehicle maintenance and repairs.
2. Pay for Usage: Car leasing follows the pay for usage model where you pay only for the period during which you use the car. Here, the period of usage is pre-determined and agreed upon by the lessor as well as the lessee. Once the usage period is over, you can surrender the vehicle to the owner and stop paying your instalments.
3. No Down Payment: This is one of the major advantages of car leasing. Here, you can start using the vehicle without making any down payment. In the case of vehicle loans, you will be expected to pay a significant amount as a down payment to the dealer. In car leasing, you pay only your monthly instalments.
4. Best Value from a Car: One of the notable advantages of leasing is that you get to drive a vehicle that is brand new and in good condition. When a car is brand new, it provides great performance. You can enjoy the best value of a car for a fixed monthly payment. This is ideal for people who like to change their cars frequently.
5. Hassle-free Deal: When it comes to car leasing, the terms and conditions are laid out clearly by the lessor before the deal is finalised. You can drive your favourite car without going through any hassles. Since the maintenance aspect of the vehicle is taken care of by the lessor, lessees can enjoy the vehicle without any stress.
6. Comprehensive Insurance Coverage: The instalment amount you pay for leasing a car includes insurance charges. You can get comprehensive insurance coverage against all kinds of repairs, accidents, thefts, etc. With leasing, you can enjoy all these benefits without worrying about the insurance renewal date or additional expenses.
7. Tax Benefit: The lease amount you pay for a vehicle is eligible for tax relief. Leasing a vehicle could help you save as much as 30% on your taxes. This is applicable for self-employed as well as salaried professionals.

 one of the notable advantages of leasing is that you get to drive a vehicle that is brand new and in good condition. When a car is brand new, it provides great performance.

You can enjoy the best value of a car for a fixed monthly payment. This is ideal for people who like to change their cars frequently

How to Lease a Car?

The procedure that must be followed to lease a car is mentioned below:

1. Visit the official website of the company.

1. Choose the car.
2. Next, choose the duration of the lease.
3. Select the mileage.
4. Choose the monthly payment that must be paid.
5. Agree to the terms and conditions and submit the necessary documents.
6. Next, visit the showroom to pick up the car and complete the process.

*These prices are representative. Actual prices may differ depending on the car and the tenure of the lease agreement and other factors. Please check the latest prices before applying. 

The best time to buy a new car is now. Browse through BankBazaar's exclusive assortment of car financing options that could make your dream come true!

Car Lease Approval Process

The process involved in leasing a car is very simple. The first and foremost thing involved in leasing a car is finding the right vehicle and dealer. Research the market to find the best vehicle suitable for your needs.

You need to do your research based on the various aspects including price, mileage, affordability, car safety features, rating, etc. Once you have chosen the vehicle and dealership, you can visit the dealership and submit an application for leasing a particular model.

1. The dealer will provide the options available for leasing a vehicle.
2. You need to check out the terms and conditions before you sign up for leasing a car.
3. You also need to choose the car lease tenure for your vehicle. Some dealers provide flexible terms, while others have a fixed term for leasing a car.
4. Once you have finalised the terms, you can proceed with the leasing process.
5. The dealer will check your credit score and ask you to submit the necessary documents. This typically involves identity proof, address proof, income proof, age proof, etc.
6. Once the documentation is complete, you can take out the brand-new vehicle on lease.

Corporate Car Lease

Car lease is a relatively niche concept in India. Though it is not very common among individuals, leasing is a popular option among corporates who provide vehicles for their employees. Here, companies can sign up for a lease program with a specific dealer and provide vehicles on lease for their employees. Here, the employer is the primary lessee and the employee is the secondary lessee.

The vehicle will be leased in the name of the company. The cost of the lease is calculated based on various factors like car lease tenure, vehicle model, price, maintenance charges, insurance costs, etc.

Car Lease vs. Car Rental

The key differences associated with leasing and renting a car are given below:

Types of Car Lease

Closed-end lease: This sort of car lease is the most typical; it follows the above-described standard leasing procedure and expires on a specific date. For instance, if you sign a lease for a car on 1 January 2024, it must be returned by 1 January 1, 2027. The lease is for a three-year period.

o Pros: The cost of the car at the end of the lease is fixed.

o Cons: If you return the automobile earlier or later than the scheduled time, you could face fines.

Open-end lease: An end date is not specified in open-end leases. Instead, they offer a wide window of time with no extra fees for returning the automobile early or late. This window's size can change.

o Pros: Allows you to choose when to return the vehicle.

o Cons: Because the cost of the car isn't established, you have to pay the difference between the predicted value at the beginning of the lease and the real value at the conclusion.

Subvented Lease: This is a particular discount offered by the leasing firm and is a subtype of a close-ended lease. This discount may take the shape of a lower interest rate (often known as the money factor), which lowers the APR, or a discount on the purchase price of the car, which lowers the capitalised cost.

o Pros: Enables you to reduce your lease costs.

o Cons: To qualify for this form of lease, you typically need a high credit score.

Single-Payment Lease: In this kind of lease, you pay the entire lease price up front rather than making monthly payments. This lease type can be combined with additional choices, such as a close-ended single payment subvented lease.

o Pros: Savings obtained over time by eliminating interest on monthly payments.

o Cons: Demands a sizable lump-sum payment up advance.

Used Lease: Leasing a used car is an option, albeit it's less typical than leasing a new one. You might be able to obtain a used automobile lease through a dealership, a used car lot, or by "lease swapping," which is the practise of taking over another person's lease. Although a used car lease may have less rigorous credit standards than a new car lease, approval from a leasing company is often required.

o Pros: Compared to new automobile leases, monthly payments are lower.

o Cons: Since the vehicle is no longer covered by a guarantee, you can be liable for the expense of repairs.

Short-term and long-term lease: The words "short-term" and "long-term" car leases refer to the shortest and longest lease lengths offered for the types of leases previously mentioned. Long-term leases last longer than four years, while short-term leases often last less than two years. It's vital to keep in mind that not all leasing businesses provide these particular alternatives for lease terms.

o Pros: While long-term leases can help keep your monthly car payments cheaper, short-term leases might be more affordable than standard rentals.

o Cons: Long-term leases may require paying the full worth of the automobile without ownership rights at the conclusion of the lease term, although short-term leases may be comparatively expensive because a car's depreciation is most in the first year.

Things to Note Before You Lease a Car

Before you decide to sign up for leasing a car, you need to consider the following factors:

1. When you lease a car, you need to pay your lease instalments periodically (typically every month) without fail. Make sure you can afford this payment every month.
2. In India, leasing is not a popular option among customers. You need to scan the market and shop around to find the best deal for your needs.
3. You can get good deals on car leases if you have a great credit score. Before you sign up for a lease, check your credit score and get your credit report.
4. Do the math and work out the calculation for the costs involved in leasing a car. You need to make sure that leasing is a cheaper option than taking a loan to buy a new car.
5. Check out the tax benefits available for you in leasing a vehicle. However, it is not a good idea to opt for a lease only on the basis of tax benefits.

A good credit score can help you secure lower interest rates on loans and credit cards.

Get Free Credit Score