Leasing out your car is one of the surest ways of making some extra cash out of cars that you no longer use or when travelling abroad. There are a number of car rental companies that can help you lease out the vehicle to an ideal client. Nevertheless, you need to consider a number of factors so as to get the most value from the deal.
Here are 7 tips for leasing out your car that must be considered before finalizing the deal.
Before the client can drive out of your residential premises with the car, he or she is required to pay some amount of money. Some of the payments include first monthly payment, down payment, security deposit, freight and destination charges, fees to cover registration and licensing of the vehicle and list continues. The amount of money that should be paid largely depends on existing state rules and regulations as well as your personal preferences. If possible, consult a financial analyst who specializes in this industry to make an intelligent decision.
Terms and Conditions
Just like any other business deal, you need to formulate a list of terms and conditions that the client must adhere to otherwise the agreement can be considered null and void if he or she fails to abide to the rules of engagement. For example in closed-end leases, if the total value of the car is less than the estimated amount at the start of the lease, rental company or you, the sole owner of the vehicle is required by law to absorb the cost. Based on this fact, it is recommendable to carefully consider the type of lease and the term and conditions to avoid regrets down the road.
Nowadays, insurance companies offer unique temporary car insurance policies to clients who intend to lease out their vehicles for a limited amount of time. One of the major benefits of having such a policy is that it covers you from unforeseen occurrences that could occur such as accidents and burglary. You should take time to read and understand the policy documents before signing to get the best results. It goes without saying that you should choose a company that has a positive reputation and legally accredited to avoid wasting your hard earned cash on dubious insurance deals.
Duration of warranty
If you decide to lease out the car for the length of manufacturer’s warranty, you will not cater for major maintenance and repairs. Instead, the manufacturer will come in and carry out all the repairs for free. Hence, it is advisable to first look at the manufacturer’s warranty cover when determine the number of months or years that you intend to lease out the car.
There is no guarantee that the client will obey all the terms and conditions. You should always expect the unexpected by including a clause detailing how premature termination of the lease can be executed. Ideally, you should ensure that the client clearly understand the repercussion of not adhering to the agreement before signing it to avoid legal tussles.
How will the car be used?
This is one of the most important questions that you should never fail to ask yourself when leasing out the car. For example, there are clients who lease cars for strictly business needs, that is, they use the car to drive to their customer’s offices or transport merchandise to stores, malls and supermarkets.
As the owner of the car, it is of paramount importance to first understand how the client will be using the car. Such information will help you determine the kind of insurance cover that you should apply for as well as the charges. More importantly, the terms and conditions should be relevant to the manner in which the car will be used. Take time when doing this to avoid making uninformed decisions.
One of the surest ways of determining credibility of a particular client is by carry out a background research. Nowadays, there are several online tools and websites that you can use to do this from the comfort of your home or office. Steer clear of clients with bad reputation or poor credit rating to be on the safe side.
Finally, consider involving a lawyer when signing the deal to make it a legally abiding. Leasing out car to prospective clients is a ideal way of making money out of your car.