what is car leasing

Car leasing is a financial arrangement where a person or business rents a vehicle for a specified period, typically two to four years, rather than purchasing it outright. During the lease, the lessee (the person or business leasing the car) makes regular monthly payments to the leasing company or dealership. At the end of the lease term, the lessee has the option to return the car, buy it for its residual value, or sometimes lease a new car.

Key features of car leasing include:

1. Lower Monthly Payments: Lease payments are often lower than loan payments for purchasing a car because you’re essentially paying for the vehicle’s depreciation during the lease term, not the full price.


2. Limited Mileage: Most leases come with mileage limits (e.g., 10,000 to 15,000 miles per year). If you exceed this limit, you may face additional charges.


3. End of Lease Options: At the end of the lease, you can return the car and walk away, buy it for a predetermined price, or lease a new vehicle.


4. Maintenance and Warranty: Leased cars are usually covered under warranty for the duration of the lease, and some leasing companies offer maintenance packages.


5. No Ownership: Unlike a car loan where you eventually own the car, with leasing, you never own the vehicle. It's simply a long-term rental.

Car Leases Under $200 a Month no Money Down is often preferred by those who want to drive a new car every few years without dealing with long-term maintenance or resale issues. However, if you plan to keep a car for a long time, purchasing might be more cost-effective.