Leasing a car or truck has become one of the payment vehicles of choice in today’s economic climate. It is particularly favoured mainly because it provides an appealing way to drive a new vehicle which you might not be able to afford through typical financing programs; it may not otherwise be affordable.
Leasing places you in a unique position – it enables you to make more affordable monthly payments as compared to conventional automobile finance loans.
In today’s market, approximately one out of every four vehicles being driven by motorists in Australia is actually leased.
The typical perspective of most automobile purchasers is that the dealership from which the car is purchased from is also doing the lion’s share of the leasing; this is rarely the case. The vast majority of dealers function as intermediaries – brokers and middlemen – for the car maker’s finance company or third-party bank or lending institutions. While it may certainly be possible to lease your vehicle from the local car dealership, you can likely save money by leasing through an independent leasing company or even directly through a bank.
Most dealers typically view leases as additional tools to help aid them in making the sale. The dealership wants to shift the thinking of a prospective buyer from one that is centred on the selling price of the vehicle to a focus on the monthly payment amount. This shift is logical for the dealer to do – the monthly instalments will always be a small fraction of the selling price. Leasing allows them a great deal of latitude in making the vehicle seem affordable by being able to vary lease terms that may include: time, rate, mileage allowances and other factors.
Every metropolitan area has its own stand-alone, non-affiliated leasing company that can offer leasing solutions to a wide range of purchasers that can also be corporate fleet customers. These businesses and their leasing agents will always be in the role as brokers or middlemen; the approvals of the actual financing will always be provided by a bank or other lending institution specialising in these kinds of purchase arrangements.
Leasing directly from a bank is sometimes beneficial. When this option is deemed best for you, there are no middlemen; your contact and the leasing will be done one on one with the bank. There will usually be numerous banks and other financial institutions that can offer a leasing product that will meet your guidelines for monthly payment amounts, term and all of the other considerations.
It is also important to note that a third-party lessor will not usually sell your lease agreement to a bank. They are authorised as the leasing company with the vehicle manufacturer, which means they have complete access to all of the information about the vehicle – this includes wholesale confidential pricing. When you combine this capability the lower costs of the funds, they are often in the best position to offer you a lease at the lowest possible cost.