Long Term Leasing or LLD is a contract by which an individual or company rents a car without a buy-back option. This formula allows the tenant to use the vehicle for a long period of time while managing his budget as well as possible. It is very suitable for those who tend to change cars from time to time.
In concrete terms, what is LWB?
The LLD is a car rental contract offered to individuals and companies. In return for the use of the vehicle, the lessee pays monthly payments to the lessor. According to the terms of the LLD long-term car rental contract, the rental period varies from 1 to 5 years. Unlike Lease with Option to Purchase (LOA), LLD does not allow the lessee to purchase the car at the end of the agreement. This leasing offers many advantages for private individuals. Indeed, they have the privilege of having a vehicle even if their budget is lower.
The calculation of monthly rents in LLD
The monthly payments to be paid during the term of the LLD contract are fixed. Several elements are considered in the calculation of rents, namely the new price of the vehicle, the residual value of the car at the end of the contract, the rental period, the mileage during the rental period and the services offered by the lessor. Other parameters such as the make and model of the vehicle can also be considered.
Additional services offered by funding agencies include car insurance, alternative vehicle insurance in the event of a breakdown and car maintenance. At the end of the contract, the lessee gives the car back to the lessor.
Information to know before subscribing to a LLD contract
Although LLD is an alternative to buying a car in case of a limited budget, certain conditions must be met to subscribe to this contract. This relates to mileage. Indeed, the latter is fixed and fixed in advance in the terms of the agreement. If the tenant exceeds the previously indicated mileage, he will have to pay penalties.
In addition, some LLD contracts do not provide for a contribution. However, depending on the valuation made by the lessor at the beginning of the agreement, the lessee may make a security deposit. This guarantee will be returned to him at the end of the contract. At the end of the agreement, the tenant can submit to a new LTA as many times as he wishes.