Everything you need to know about private leasing

Private leasing (private car leasing) has become a popular option in recent years among many people who seek to enjoy the convenience of a new car without the need to purchase it outright.

Moti Cohen, Chef de la Division Leasing et Location chez Eldan / Photo : Eldan

Here is a detailed guide that will explain the advantages, disadvantages, and essential details about private leasing, including the advantages of private leasing compared to buying a car. In a world where convenience, flexibility, and precise financial planning are critical, private leasing is a preferred choice for private customers. So for this purpose, we turned to Moti Cohen, Head of the Leasing and Rental Division at Eldan, who will explain and detail for us what the advantages of private leasing are, and then he promised that we would receive some tips, that's what happens when you get advice from an expert!

What is private leasing? Private leasing is a process where a customer rents a car from a leasing company for a fixed period, usually 36 months. Additionally, there are companies that offer 48 months (4 years).

At the end of the period, the car is returned to the leasing company. In return, the lessee pays a fixed monthly amount for the use of the car.

And not for its purchase, maintenance, insurance, licensing fee, replacement car, towing, and rescue services, etc.

1. Maintenance costs: One of the main reasons that make private leasing attractive is the inclusion of maintenance and insurance (which these days are skyrocketing for drivers with different levels of experience), and the licensing fee in the monthly amount. Thus, the lessee does not have to worry about unpleasant surprises of expensive repairs. Compared to buying a car, where every repair or maintenance is at the cost and responsibility of the owner.
2. Replacing the car at the end of the period: At the end of the leasing period, you can choose to renew the contract and get a new car. This way, you can always enjoy new and advanced cars. Compared to buying a car, where the user may be stuck with an old car that loses its value month by month.
3. No need for a large down payment: Unlike buying a new car that requires financial planning, private leasing allows you to start using the car with a minimal down payment, tailored to the customer's ability. In simple words, the most important thing is that there is flexibility in the down payment, there are cases where the car serves as the initial down payment, a kind of "trade-in".
4. Lower monthly payment: A private leasing deal that is spread over up to 48 months allows you to divide the total cost over a longer period, which directly affects the amount of the monthly payment.

Thus, the lower payment makes leasing more worthwhile and leaves more cash available in the family bank account. 5. Depreciation of the car: In a private leasing deal, the customer has no connection to the issue of depreciation, and this does not concern the customer at all. Especially in a business environment where the multitude of brands creates uncertainty about the future value of the car more than before. The customer does not need to check the Levi Yitzhak price list from time to time to see what happened to the value of their car, so they know for sure that they have no chance of being harmed by fluctuations in used car prices and are not exposed to it. Additionally, this eliminates the need to deal with selling the car with all that it entails.

Disadvantages of private leasing

1. Car usage issue: In the contract itself, the number of kilometers that can be driven in the car during the period must be specified in advance. Exceeding the limit may incur additional costs, meaning that the real need for the amount of mileage must be defined correctly on an individual basis.
2. Additional costs: At the end of the contract, in certain cases, there may be additional costs for self-damage to the car (unless you meticulously maintain the car like us).
3. Commitment to a long period: Usually, the user is committed to the leasing period agreed upon in the contract. If there is a need to terminate the agreement earlier than planned, there may be expenses for early exit fees.

(In the case of Eldan, there is an option to exit after 36 months without a penalty)

What should we check before upgrading to private leasing?

1. Monthly costs and conditions: It is important to read the terms of the agreement carefully and ensure that everything is understood, including possible additional costs.
2. Insurance coverage: Check what types of insurance are included and the ability to upgrade the coverage if necessary.
3. Flexibility policy: Check that there are options for flexibility if needed, especially if our needs change during the leasing period.
4. Service provider: Check the service provider's ability in terms of experience, reputation, and of course, that they have the infrastructure to provide the promised service.

Is private leasing worthwhile? Moti Cohen added, "The answer to this question will vary from customer to customer, depending on their needs and preferences. For those who spend a lot of time on the road and appreciate new features in car technology and love driving a new car all the time without buying it, private leasing is an excellent option. Furthermore, Moti concluded, "Private leasing can be an efficient and convenient solution for renewing a new car without committing to a purchase. But, to ensure that this is really the right choice, it is advisable to understand in advance all the costs and conditions involved in this decision and more than anything to know that there is a reliable and strong address at any given time, capable of solving any problem from small to large even before it occurs, and that's where you can find us."