However, leasing an automobile is a complicated transaction that can be cost effective for certain drivers and excessively costly for others. The majority of consumers are familiar with the practice of buying a new car. This involves either paying for the entire cost of the car upon delivery, or making a down payment followed by monthly payments. When you finish paying for the automobile, you will own it. A lease, however, is a different way to acquire a new car.
Dealers increasingly offer leases as an option to buying.
Leasing is a concept that is misunderstood by many consumers who are shopping for a car. Knowledge about the advantages and disadvantages of leasing can be useful no matter how you plan to finance a new car. An auto lease is a financing agreement where the consumer pays for the use of a new automobile over a set period of time. The car is owned by the leasing company, which can be a bank, the auto dealer, or an independent company, who sets a financing rate for the term of the lease. At the end of the term, the car is returned to the leasing company, unless there is an option to buy in your leasing agreement.