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Car leasing is similar to renting an apartment, since monthly payments are made while enjoying the temporary use of the vehicle.
Leasing may be an attractive option if you are not interested in owning a car or prefer to drive newer cars. This article will teach you all the benefits of a FirstBank Auto Leasing. Keep reading!
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View articleWhat is car leasing?
A lease is a contract in which one party assigns the use of something (a parcel of land, a building, a service or other object) to another party for a specified period of time in exchange for a payment, usually periodically.
In the case of leasing a car, the object that is transferred is the vehicle itself. The difference between leasing and financing is that with financing you are buying the vehicle to own it, and with leasing, you usually don't own the car, unless the contract includes the option to buy the vehicle at the end of the contract period.
Benefits of a FirstBank Auto Leasing
Below, you will find out if leasing is the best option for you and the benefits FirstBank offers you:
- Lower monthly payment
Unlike a conventional loan, with leasing, you can take apart a residual value of up to 35% depending on the car’s make and model. The residual is a portion of the principal value that is postponed to be paid at the end of the lease term. At the end of the financing, you can acquire the vehicle by financing it or paying the residual in its entirety. Also, you can choose to change your vehicle again by obtaining the financing alternative that best suits you. This results in a lower monthly payment that better fits your budget.
In addition, it is important to consider that the insurance policy is not part of the leasing financing, further reducing your car's monthly payment. If you have other cars with separate insurance policies, you can insure your leasing car as part of the master policy you already have.
- Payment Flexibility
While with a conventional loan, you incur daily interest charges during the 15-day period following the due date of your payment. With a lease, you do not incur any charges during said period. Still, you will pay a charge for each late deadline for more than 15 days.
- You Can Upgrade to a New Car
If you want to change the car frequently, achieving it with a lease is more convenient. Every year, they launch new and more advanced models to satisfy consumers’ tastes. In addition, by driving a new car, you reduce inevitable mechanical expenses over time. If you have a vehicle financed with leasing and want to upgrade, you can do so without penalties. If there is a residual at this term, we will help you obtain appropriate financing. All subject to credit approval.
- You Will Have an Executive with You at all Times
Your relationship with the executive does not end when you close the loan. When you do leasing, you will have an executive willing to help you in matters related to the renewal of your label and insurance policies processing. In addition, the leasing executive will be available to help you get the best possible deal with the dealer when upgrading to a new car.
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View articleHow Does Car leasing Work?
The terms and conditions of any car financing must be clear before signing the contract, and leasing is no different. There is usually an agreed annual mileage limit. If you exceed it, you will have to cover a penalty at the end of the contract.
Most leases do not include maintenance, although there may be an option to add it to the monthly payments. Unless you specify it, you will be responsible for the car’s maintenance, but it may also be possible to buy a service package from the manufacturer that does the same work.
You will also have to ensure that the car is in good condition before returning it at the end of the contract. If it is damaged, the finance company will expect you to cover the cost of repairs.
What are the Types of Leasing?
Leases are not unique. In itself, the leasing concept does not change, but the contract details do. Here, we describe some of the types of leasing contracts:
- Closed Lease
A closed lease is the most common form of lease. Establish firm terms that allow the tenant to leave at the end of the lease. All the variables, such as the length of the contract, the monthly payments and the mileage limit, are established in the lease agreement. As long as the terms of the contract are met, the lessee can leave the car at the end of the contract. The lessee also has the option to purchase the vehicle at a predetermined value.
- Open Leasing
Open leasing is a greater bet for the lessee, who assumes greater risk. Typically, the lessee is a commercial enterprise or business. The leasing company continues to set a residual value and monthly payments.
Luckily, open leases often have more flexible mileage options than their closed-end counterparts. However, unlike a locked-in lease, if the residual value at the end of the lease is less than the car's actual market value, the lessee must pay the difference.
- Leasing of a Single Payment
It is a leasing in which the entire monthly payments are paid in advance. There are two main reasons for choosing this route. It usually lowers the interest rate or the money factor. If your credit is shaky, a single down payment can motivate a leasing company to take a chance on you.
Analyze if leasing is the best option for you. Here at FirstBank we can help, just call 787-725-2511 or visit us to start the process. Contact us today!
Get ready to drive the car you love thanks to FirstBank Car Leasing
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The contents in this section are provided for informational and educational purposes only and do not apply to all types of situations. The contents should not be construed as any type of advice or suggestion to take (or refrain from taking) any particular action, as it does not include or take into account all factors that may be relevant to your individual needs.