Car Leasing, The Benefits
Car leasing, also known as car hiring or contract hiring in several countries, are popular with companies who do not want to buy, maintain, and sell their own fleet of vehicles. These businesses can enter into an agreement with the dealership that can last as little as a few months to as long as a few years and that will provide the company with the keys to one or more vehicles without any of the hassles that would normally come along with the ownership of those vehicles, making it a win-win situation for both the dealer and the company leasing the cars for hire.
There are many other benefits to the lessee, though. First, the cost of leasing the vehicles is much lower than the cost of purchasing these vehicles. Because of the short length of time that these vehicles are held by the company, they often are not seriously maintained which helps the company avoid many expensive repairs. The vehicle fleet remains reliable because it is replaced every few years at a minimum. Further, the company does not need to deal with selling the car before they can start obtain a new fleet of vehicles. All that needs to be done is to hand the keys back to the dealership and begin with a new lease.
The benefits aren't just for the lessee, though, as leasing is a highly profitable part of the dealership's business. In normal situations, a car would be purchased and may even be outright paid for in cash. In this case, the company is only paid the base value of the car. Any situation that can incur interest helps the bottom line of the dealership, and leasing is one of the situations that allow the dealership to tack on interest. When you lease a vehicle, you're not actually paying for the value of the vehicle, but for the value of depreciation; this fact allows cars like Hondas to keep their monthly leases low while other car's leases are much higher. This depreciation is considered a loan by the dealership and they add interest in to the payments, allowing them to turn a profit on a vehicle that they haven't actually sold by renting it out.
So if you're looking for a new vehicle, leasing a car for hire may be a solution that would be of value to both you and the dealer—allowing them to earn more money than they might if you decided not to finance through their dealership and allowing you to spend less money to get behind the wheel of the car that you wish to drive.