Six FAQs of Auto Leasing in Qatar You Probably didn’t know!
For car enthusiasts who couldn’t afford buying new vehicles, leasing is an excellent alternative. There are lots of benefits if you make no mistake when making a deal but many confusing factors are there as well. If one is to master the secrets of auto leasing, better be familiar with more than mere terms and conditions. Consumers need to understand every single fact in detail before taking any decision. Many drivers prefer car rental usually for 24 to 36 months when staying in Qatar for longer. If you’re good at bargaining, landing a profitable deal won’t be a problem.
- How to Determine Lease Interest Rate?
Interest rate in car lease is often reflected as “money factor” instead of annual percentage rate (APR). In order to convert, compute this “money factor” (that usually appears as a decimal such as .004) by 2400 for instance. Here as we mentioned, .004 when multiplied by 2400 will convert into an APR of roughly 9.6 percent. Dealers mostly use this money factor in a dishonest way to collect more lease from car renters. Money factor is another technique to calculate accrued interest.
- Is Leasing Always a Better Option Than Buying?
Well, not necessarily! If auto-mobile industry were only dealing with lease, there wouldn’t be any buyers eventually resulting in market collapse. Still, we can say that car lease is often better than buy as you get to test many different vehicles this way; apparently not possible with a permanent purchase. Same rules are applicable when you own a small business or self-employed (tax breaks). If you prefer keeping the same vehicle for a long time or drive more than 20,000 miles per annum, leasing is definitely a bad decision.
- Is Lower Priced Vehicle Also Provides Cheaper Lease?
Again, not necessary! Major proportion of your lease payment move towards depreciation where residual value will indicate estimated cost of vehicle by end of agreement. Your lease cost would comprise of; difference between residual value and price, money factor, fees and taxes. Higher the residual value; less will be the pay. Residual rates are mostly indicated in percentage of original MSRP, such as 67 percent or any other figure. So you can say a vehicle with lower cost isn’t necessarily cheaper to lease, only if it has a high depreciation rate.
- Is Your Lease Selling Price Negotiable?
For this, we would say yes as no deal is made without mutual negotiation. Dealers always try to confuse their consumers only to get maximum lease amount. They would tell leases are non-negotiable and based on vehicle’s MSRP but this isn’t the real case. Though residual cost is based on MSRP, there’s actually a selling price to lease known as “cap cost”. And that’s clearly mentioned on every lease agreement.
- Once the Lease is up, what’ll become of the Vehicle?
Two things are likely to happen once the lease is up! You can either buy the vehicle over residual cost as agreed at the time of agreement or return the vehicle to dealer. While returning the car to dealer, it’ll be stored till leasing company (that’s usually the manufacturer) picks it up. This leasing company is likely to sell the vehicle at a car auction or offer it to a dealer for wholesale.
- Is There Any Additional Fee When Lease Term Expire?
Several factors are taken into account before allotting extra fee. Although there isn’t any by the time your lease is up, charges may apply if car has experienced damage or you’ve exceed mileage limit.
So the next time you look for car leasing in Qatar, better understand the common questions for convenience.