What you need to know about the renewed lease

A renewed lease is one of the cheapest and easiest ways to lease a new car, and you don’t have to earn a high executive salary. It’s a three-way deal between a financier, an employee, and an employer. Here is an overview of this type of lease package:

How does it work?

The renewed lease is likely to have a term of two, three, or five years. Once the lease term expires, it is possible to upgrade the lease to a newer model or, if preferred, pay a full purchase fee to take full ownership of the vehicle.

This type of lease package has a variety of benefits and is different than a typical car loan. Innovative leasing is paid out of your pay before taxes, which means your money has the potential to go further and is helpful in reducing a person’s taxable income. On the other hand, the regular loan makes use of your salary after taxes.

The actual process for the employee is relatively straightforward. Most companies have set up a system to allow employees to enter a preferred lease term, type of car, and current salary to give a clear indication of the options available to them.

What are the benefits?

Tax Effective – A major benefit of the renewed lease is that it is very effective and you can pay for the car and running costs using pre-tax income.

Increased Purchasing Power – The ability to lease through a fleet company is sure to give you more choice in the type of car you can drive. The discount opportunities from using a fleet provider are much more competitive compared to what you might get if you walked into a dealership on your own.

Easily upgrade your car – Another big plus is the ability to trade in the vehicle once the lease is up. This kind of flexibility is great for drivers who always want to drive the latest models.

Service Requirements – This type of arrangement is also useful for managing all of your service requirements. The cost of maintaining the vehicle is often included as part of the lease package.

Are there any risks?

In addition to the many different benefits, there are also some potential pitfalls worth considering. For example, it is essential to have job security to ensure that this type of lease is maintained. Also, in recent years, the tax benefits of a new lease have slowly begun to decline.