Car leasing today seems to have become a hard science with all the islamic/unislamic/fixed-rate/KIBOR-linked rate/flexible-tenure/flexible-downpayment/insurance options ‘mumbo-jumbo’ and what not but infact it is as much an art as painting or photography. Before I confuse you further with my ‘Science of Art’ lecture here is me breaking my “banker’s code” to let you in on all the unpleasant secret “they won’t tell you” while selling you a car lease.
According to howstuffworks.com website, Leasing has two principal benefits:
(1) You drive a newer vehicle that is always under warranty and seldom needs more than routine maintenance.
and
(2) you often get a larger, more luxurious, better-equipped car.
I believe another very improtant ‘benefit’ missing from the list is the commission offered to the dealer/lease-salesperson & strictly-religious vs moderate orientation. Meaning that even in today’s day & age the car dealer or lease/loan salesperson can force you to get a lease or loan depending on which makes them more richer.
For people working strictly on commission basis the single most important motivation is how much they get out of each deal so beware of them. The people employed by the bank/FI on salary basis are genrally more reliable in their committed offerings. I am just saying that be careful and make sure that the person selling you the car lease is not just making forced sales & expecting no repeat sales from satisfactory regular clients. Let this be your first lesson while leasing a car - NO BROKERS - neither car dealing ones nore lease pushing ones.
Having already discussed the major differences between conventional Leasing & Ijarah Financing (Islamic mode) the next post will deal with KIBOR & how rates get pegged to it including a detail about its merits and demerits.
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