When thinking about leasing a particular car, a lot of the people ask themselves one question: Should I lease, rent, or preferably buy? Leasing, buying, and also renting a car are all very different processes from each other and the financial stakes are also much varied. The car leases and purchases are both methods of the auto financing - with the popular method of leasing, you're paying to drive the vehicle for a certain amount of the time (often two or three years), whereas buying particularly entitles you to actually own the vehicle at your own stake.

Cars lease deals is very advantageous to the drivers that prefer some brand new vehicles of latest trends and designs, are unsure of their long-term vehicle needs, and/or do not want to deal with the various hassles of selling their cars later on in the market. Alternatively, buying is indeed perfect for the drivers who are more concerned with the long-term costs and various needs.

Tips on car lease deals

Renting a car is something really different altogether. Unlike the buying and leasing, whose costs are largely and considerably determined by a certain set of important factors such as the vehicle's market value and the expected depreciation, the rental expenses do not follow a definite formula. Thus, renting a car is generally not that cost-effective, and is only recommended for the short term use (less than one year - ideally just a couple of days).

If you have rightly decided to lease some new cars, you might think you are done asking yourself the various questions, but here's one more to consider: Do I want closed-end or open-end car lease deals? Open- and the closed-end leases are the two primary types of the car leasing deals. The closed-end leases are indeed more financially beneficial to the lessee, while the open-end leases protect the leasing company in a considerable manner.

Before going any further, it is certainly very important to remember one important concept of leasing a car: the residual value which is certainly very important. In car leases, a vehicle's residual value represents its predicted worth at the end of the lease. A $20,000 car with a 50% residual percentage after the 24 months, for example, would have a residual value of $10,000. In this particular case, the lessee would ideally agree to pay the overall difference - $10,000 - plus the appropriate fees.

Residual value of a car

In order to predict a particular car's residual value, the car leasing companies look at the history of the vehicle's overall make and the particular model, in addition to the factoring in the duration of the lease and the expected mileage of the respective car. Therefore, the residual value is the overall estimation - not a sure thing - meaning that at the end of the lease, the vehicle could be

worth more or less than the anticipated

Now, let's discuss the difference between open- and closed-end leases. The closed-end car lease deals are also known as "walk-away" leases, because they allow the particular lessee to simply walk away at the end of the particular lease, regardless of the car's actual value. The lessee will only have to pay for the various damages and/or extra mileage as stipulated in the contract. In an open-end lease, however, the lessee must cover the difference between the final worth and the overall forecasted residual.

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