What comes next is the best alternative not to lose money. You should lease a car. While leasing is the best way to go around a depreciation loss, it should also be known that not all buyers of cars actually focus on the depreciation element. For these buyers, it is just the thrill of owning a car. That aside, leasing is the best way to have a vehicle for yourself. It allows you to possess a new car without actually owning it. No large upfront payment, no hefty loans and submitting any collaterals. All you need to do while leasing a vehicle is to mutually agree with the leasing firm on a fixed monthly amount for the period you decide to keep the car. The monthly instalments for leasing a vehicle typically include and cover the cost of the car, its insurance, maintenance, service, road tax or any other vehicular taxes. The leasing company bears all these.

Areas to focus on when leasing a car :

Your driving pattern and expected annual travel

Leasing companies usually stipulate an upper limit and cap on the number of miles or kilometres travelled in a calendar year. This is the primary criterion on which financial calculations of the car, its life expectancy, service requirements, repairs and replacements are all computed. These then collectively constitute the basis of the monthly fixed instalment. Leasing companies also levy penalties and extra charges if the mutually agreed number of miles or kilometres travelled is exceeded in one calendar year.

Read the Leasing Contract

As a consumer, it is your right to know the basis of every single penny or cent being charged. Best for you to ask questions irrespective of whether you feel the question is trivial or irrelevant. Getting the correct explanation and understanding the charges will help you in the long run. Read through the fine print and look for the add-ons. Make sure the leasing company inserts none without your consent.

Check and Verify Mandatory Regulatory Compliances

Simple checkpoints like validating the number plate and VIN number with the details mentioned in the lease contract. Checking the validity and coverage of the insurance, validating the registration period and taxes paid certificate and ensuring the maintenance contract is up-to-date and in line with the lease contract.

References and Reviews

Today's internet world can generate an immense amount of information which could help you check, verify and select a car. Many people post reviews and their individual experiences through which you can get valuable insights into the actual working capabilities of the leasing agency.

Service Charges and Fees

As a car lease owner, you must know every charge and fee upfront. You must ensure that services, repairs and handling charges are most cost-optimised without reducing the SOPs or service levels. It is always better to decide on the total service required, the periodicity of the service, and charges per service and only then agree to the fixed monthly lease instalment.

End-of-Term Residual Value

Residual value is the financial calculation which is an estimated value of the car at the end of the lease period. While there are different methods of calculating a vehicle's residual value, it is typically calculated as a percentage of the MRP or Manufacturer Retail Price when the car was out for sale originally. Calculation of the residual value of a vehicle also takes into account the depreciation and other expended attributes like normal wear and tear, possible resale value and the number of miles or kilometres likely to be travelled or already travelled.

Considering all aspects, leasing a car ensures that you need not have to pay any large upfront amount or get into any long-term commitment. Simply decide how, when and for how long you want to stay in the lease agreement. Above all, there is no need to stress about loans or EMIs or any collaterals.