Vehicle Lease Agreement
A vehicle lease agreement is an alternative to vehicle purchase. Some dealers offer it it customers who want a new vehicle but do not want to purchase the vehicle. It is also widely used by businesses to acquire vehicles for business without the needed cash outlay. The main difference between a vehicle lease and a vehicle purchase is that after the lease term (usually 2-3 years) the vehicle has to be returned to the leasing company or dealership.
Leasing a vehicle can offer advantages for both the buyer and seller. For the buyers, qualification is often easier than purchasing a vehicle, and payments are usually lower. There is also the added benefit of driving a new vehicle every few years without the hassle of selling the old vehicle. All the lessee has to do is turn in their vehicle when the lease agreement expires and they do not have to be concerned with their vehicle’s resale value.
For the seller, a vehicle lease agreement generates income. A customer that chooses to lease a vehicle instead of purchasing one will either have to return the vehicle and get a new one, extended their current lease, or buy the vehicle. Since customers generally use a leased vehicle for a shorter period of time than a purchased vehicle, leasing can generate repeat business quickly, which can, in turn, generate more revenue for the dealership.