Car Leasing

With car leasing, you negotiate a price with a car dealer for the vehicle you would like to purchase. Once a price is agreed upon between the car dealer and yourself, you will sign a car lease contract.

The car dealer actually sells the car you are buying to a car leasing company, whom you pay a fixed monthly price in order to lease from that company.

Hence, the car leasing company is the company providing the car to you on the price agreed. The price you pay determines the monthly payments you will be making.

Before the the end of the lease period, you have the ability to sell the car back to the car leasing company, pay off a balloon payment in order to take full ownership of the car, or can sell on your car as long as the lease is also paid off.

The reason that this is different to getting a car loan is that with a car loan, you, as a customer, own the car but simply pay off the loan you have taken from the loan provider.

Should you not keep up with payments, your car can be repossessed. If you decide on a secured car loan, the car loan company can also repossess your house.

With car leasing, the worst that can happen is that the car leasing company takes the car back.