Car leasing: what is it, types, advantages and characteristics of this new purchasing modality?
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The way we buy and consume products has changed, both in terms of everyday consumer goods and even in terms of cars and homes. These major changes mean that car ownership is no longer the only way to enjoy a vehicle. In recent years, other options have emerged in the automobile market that adapt to a new mobility, such as car sharing or car leasing.
More and more drivers are taking advantage of the benefits offered by leasing, an alternative way to enjoy a car without worries, with everything included in exchange for a monthly payment. If you are wondering what leasing is, what services it includes or what advantages it offers you, read on and you will discover why it is the purchase option that you are going to take into account the next time you are going to change your car.
What is car leasing?
Imagine getting a new car every 3 or 4 years, with all the maintenance included and a comprehensive insurance that covers you in any situation. This is, in essence, car leasing, an alternative option to buying a vehicle that is based on a contract between the customer and the leasing company.
This contract governs the conditions of the leasing (duration, mileage...) and the services included. But don't worry about this contract, the main virtue of car leasing is its flexibility and that you are always the one who chooses. It is designed to adapt to the needs of each driver, so you can choose both its features and the services included in the leasing.
A leasing contract has a fixed duration, ranging from just a few months to a maximum of 5 or 6 years, depending on the leasing company. You must also choose the number of kilometers you are going to drive annually and what services are included in the contract, whether it is maintenance, fines management, tire replacement...
Based on these characteristics and the type of vehicle you have chosen, the monthly amount is defined, that is, the payment you will make each month. This amount is fixed and will never vary throughout the term of your leasing contract, so you will always know how much you are going to pay so that there are no surprises.
What happens when the lease term expires? Once your contract expires, you have three possibilities to choose from:
- Get a new car (the same or another model) for the first time by renewing your leasing contract.
- Keep the vehicle by paying cash or financing the remaining amount of its value.
- Return the car and terminate the contract.
What types of leasing are there?
Car leasing is designed both for private drivers and for companies and freelancers. It adapts to all types of profiles, varying its characteristics and services, which makes it an ideal option for those who use the car only on weekends or for those who make the vehicle an indispensable tool for their work.
Therefore, there are different types of car leasing that vary their characteristics depending on the customer. The most common types of leasing are:
- Long-term leasing: this is the most conventional type of leasing. It is designed for users who will need a car in the coming years, with contracts that include durations ranging from 3 to 5 years. In general, they offer all the services, including the management of the ITV when exceeding the terms of the technical inspection.
- Flexible leasing: in this case, flexible car leasing is one that offers the same features as long-term leasing, but with a shorter duration, a minimum of 12 months. This modality is perfect for the driver who knows how long he will need the vehicle.
- Monthly leasing: do you only need a car for 1 or 2 months? Monthly leasing is the perfect option, since it allows you to enjoy a vehicle for shorter periods of time. This is the modality you should hire if you need a car for a specific period of time, either for leisure or to cover a temporary need.
- Subscription: the car subscription mode is the most flexible option. It has a minimum permanence of about 3 months and, by paying a monthly fee, you have access to a vehicle. The particularity of this type of contract is that you only pay for the use you make of the car, which can be very economical if you drive only sporadically.
- Renting with option to buy: although in renting you can choose what to do with the vehicle once the contract is fulfilled, which also includes the final purchase in property, the renting with option to buy modality is designed for those users who know with certainty that they will end up acquiring the vehicle at the end of the contract. This allows you to enjoy the car for the first few years with all the services included and finally own it outright.
What does car leasing include?
The services included in car leasing vary depending on the manufacturer or leasing company. Each offers its own advantages to be more or less competitive in the market. However, the basic services included are usually common to all contracts:
- Periodic vehicle maintenance
- Repair service for mechanical breakdowns or damage caused by traffic accidents.
- Fully comprehensive insurance without excess
- Management of the Registration Tax and the Tax on Motor Vehicles (IVTM)
- Management and processing of the ITV
- Roadside assistance 365 days a year
- Management and processing of traffic fines
Optionally, leasing allows you to add some additional services that improve coverage, such as tire replacement, a fuel card or a replacement vehicle for maintenance or mechanical repairs.
What are the advantages of leasing?
Car leasing offers many advantages, whether you are an individual user, a company or a self-employed professional. One of its main advantages is to always enjoy a new car. With car leasing, you will always have a new vehicle for the first time, which gives you access to cars with the latest technology, safety and efficient propulsion systems, including electric cars.
In addition to getting a new car periodically, leasing offers you the peace of mind of paying month to month without worrying about insurance, maintenance or taxes. The monthly payments are fixed, so there are no surprises and you will always know what you are going to pay.
Leasing also allows you to choose the option that best suits your needs. Not only can you access a wide range of cars, from urban vehicles to SUVs or family cars, but you can also decide the duration of your contract, the number of kilometers you are going to drive per year and the services included, characteristics that define the amount of the monthly payment.
Another of its advantages is that, at the end of the contract, you can choose what to do with the car. Whether you keep it in property (paying or financing the final amount of the vehicle), exchange it for another with a new contract or return it, you will always be the one who chooses, with maximum confidence and transparency throughout the process.
Finally, both for companies and self-employed professionals, leasing allows you to enjoy a vehicle adapted to the needs of your business without making a large investment in its purchase.
It also includes all the services, with the peace of mind of knowing that you will always have a vehicle when you need it without worrying about maintenance, ITV or the payment of insurance and taxes. And it has tax advantages, highlighting the deduction of monthly payments.
What is the difference between leasing and renting?
An alternative to car leasing is leasing. Although both offer similar characteristics, these modalities are actually very different, since they have a varied approach both in the services included and in the duration or type of customer that can contract it. These are the main differences between car leasing and leasing:
| Renting | Leasing | |
|---|---|---|
| Contractor | Individuals, companies and self-employed | Companies and self-employed |
| Monthly installments | Higher costs by including all the services and having a shorter duration | More casualties by dispensing with services and being able to extend the contract for a longer period of time |
| Duration of contract | From 2 to 5 years old | From 2 to 10 years old |
| Services | All included: insurance, maintenance, taxes, etc. | Only the financing of the asset |
| Expenses | Predictable. Fixed fee and all services included | Unforeseeable. Maintenance, repairs, insurance, taxes not included. |
| Terminate the contract | Comprar el vehículo Devolverlo Cambiarlo por uno nuevo |
Comprar el vehículo Devolverlo Cambiarlo por uno nuevo Prorrogar el contrato |
| Tax advantages | At the company and self-employed level, monthly fees can be deducted. | For companies and the self-employed, depreciation and monthly payments can be deducted. |
| Residual value | High | Under |
Car Renting in Grupo Concesur
In Grupo Concesur we know the advantages of car leasing, so we offer you access to the programs of our 11 brands, whether you are a private driver, a company or a self-employed professional. Discover the characteristics of each of the leasing services of each brand:
- MERCEDES-BENZ Renting
- Renting JAGUAR
- Renting LAND ROVER
- PEUGEOT Renting
- OPEL Renting
- FIAT Renting
- Renting ALFA ROMEO
- Renting JEEP
- DS Renting
- ABARTH Renting
- SMART Renting
Our team of commercial advisors will answer any questions you may have about car leasing. Do not hesitate to send us your questions and discover the advantages and benefits of renting from the hand of Grupo Concesur and its more than 50 years of experience in the automotive sector.