3 Short Term Car Leasing Options to Consider
Short term car leasing is one of the best ways to drastically reduce your monthly car payments. If buying is not all that important to you and you like the thought of trading in your vehicle every few years, a short term car lease is definitely the way to go. When you are looking to lease a new car, 24 months is as short as you can go, but there are ways of securing a 12 or even 6-month car lease if you are willing to undergo a lease takeover. You benefit from a temporary car lease by enjoying extremely low monthly payments and no money down. If you like the idea of owning your car, a short term lease is not for you, nor is a long term lease. Car purchase is the right method in that case.
How a Lease Functions
It helps to understand how a lease works to fully see the benefits of a short term car lease. Rather than pay on the entire price of the car as you do when buying, when you lease a car you only pay on the cost of depreciation because the car is guaranteed to have some value when the lease expires. Thus, for a $20,000 car estimated to be worth $12,000 after a two-year period, you will only pay on the $8,000 difference. If you make a down payment, your payment will be even less. There is a finance fee called a money factor, but for short term leases the payments are much lower than if you were to buy the same car. Consider the following 3 options for short term car leasing:
Lease a New Car
Leasing a new car in the short term is possible if you agree to a 24-month or a 36-month lease arrangement. You will probably want to use a personal contract hire deal with does not obligate you to making a balloon payment after the lease is expired. Some lease deals will give you a minimum guaranteed future value on the car which is the residual amount the car is guaranteed to be worth when you return it. Provided you don't exceed the mileage or return the car with excessive wear and tear, you'll owe nothing when you return the car. If the car is worth more, you may end up with a rebate.
12-Month Car Lease
This types of lease is only possible when you assume or takeover another's lease. You will benefit for two main reasons. First, you will not have to make any down payments or drive-off fees on the car. Second, the monthly payment may be very low even for a great late model vehicle. The person getting rid of the lease is glad to be free of it, so everyone is happy. If you know the car has a high MGFV and it is well taken care of, you may even get a rebate when you return the car that you can turn into a new lease.
6-Month Car Lease
This is an even more short term version of the previous option, only available when you take over a lease. This is a good lease type if you only need a car for a limited time and wish to make low payments.
Short term car leasing can save you a lot of money provided you are not attached to the idea of car ownership. Evaluate your options for a short term car lease and decide which type is right for you.