Renewal leasing is the latest and most popular way for employees to get a new car. This type of financing method is a very attractive way to create a positive employer-employee relationship. Several companies have used this scheme to attract various employees to work in their companies. Employers offer their employees a renewed lease to provide them with company cars that they can drive for work or personal use.
A new car lease is the use of a motor vehicle for a fixed period of time at an agreed amount of money that is stipulated in the lease. This contract is a tripartite agreement between the employee, the employer and the leasing company. Leasing a refurbished car has been a very inexpensive way for companies to provide vehicles for their businesses.
Entering into a renewed car lease is extremely cheaper than owning and maintaining a fleet of company cars. However, on the part of the employee this can have advantages and disadvantages. Before deciding to enter into a lease, it is important for any employee to review and weigh the employee’s personal circumstances, financial ability and preference. If you are interested in entering into a renewed lease with your recent employer, here are some of the pros and cons of a renewed car lease:
ADVANTAGE:
• Easy qualifications and requirements.
• Renting a car requires a low down payment. There is no need for a large initial outlay of cash.
• Lower monthly lease payments than auto loans.
• You can be proud to drive a new car with the latest modern comfort and safety features.
• You can drive a new car every 2-3 years depending on your lease.
• You can drive a car always up to date and under warranty.
• Frees you from common car repairs and maintenance.
• The cost of ownership can be deducted from your salary.
• You can have the advantage of choosing the type of vehicle you want to drive.
• If you leave the company before the lease ends, you can still keep the car and enter into a new renewed lease with your new employer.
• You don’t have to worry about the future value of the car.
DISADVANTAGES:
• You do not have title to the property.
• No car at the end of the renewed lease.
• Your car has a mileage allowance, if it exceeds certain charges will apply.
• It is not allowed to make any modifications to the car.
• Leasing companies dictate the amount of wear and tear on the vehicle. At the end of the contract, each car will be assessed for wear if the degree of wear exceeds the considerable amount, you will have to pay for it.
• Your monthly payments do not go toward buying the car.
So if you’re interested in maintaining a three-way contract with your employer for a new vehicle, make sure a refurbished car lease is the best option for you. A renewed lease is different from the traditional financing method, it is best to familiarize yourself with the basic ins and outs of a renewed car lease to make a practical and informed decision.