Hibret Lebego donates motorcycles to patients
Hibret Lebego, a non-profit organization, has been reaching out to patients with low financial incomes. The foundation led by artist Solomon Bogale has sponsored twenty-three patients to receive treatments abroad. The foundation’s undying will to help continues as it has donated two motorcycles for patients with disabilities. One of the recipients was prominent journalist Tesfaye Gebremariam.
What is car leasing?
Car leasing is the rental of a car for a certain period, usually between two and five years. When leasing - you are not the owner, but pay a monthly rate that you can use the vehicle. At the end of the lease, you can return, buy or continue to lease the car. The monthly costs, known as leasing rates, are usually lower than credit rates. However, it is often not quite as easy as it sounds. The cheap dream car can develop into a cost trap.
How does car leasing work?
If you lease a car, you pay a monthly fixed rate for the duration of the lease. A leasing contract is available from a term of 1 year, the most common variant has a duration of 3 years. During this time there is no possibility to terminate the contract. This means that if you can no longer afford the monthly installments, for example, due to unemployment, you will not get out of the contract.
Car leasing in comparison - the thick end usually comes to a close
The car leasing sounds so good: For a few hundred euros a month, the dream car in the desired equipment is at the door. What many do not realize, however, are the hidden overheads and clauses in the various contract variants that make leasing more expensive than a classic car loan at the end. You should pay particular attention to the following components of the contract:
the kilometer clause or kilometer leasing
the residual value clause or residual value leasing
hidden costs for inspections, repairs, insurance
Kilometer Leasing: How the kilometer clause can become a cost trap
A common variant of the lease is the kilometer clause, also called mileage leasing. Here you agree on contract conclusion a maximum number of kilometers, which you may cover during the term. If you do less, they will be financially compensated by the lessor. Many leasing companies have a certain number of free multi-mile kilometers, often between 2,500 and 3,000 km. If you exceed these, however, you will have to pay a mileage rate. That's a midsize car between 10 and 15 cents per kilometer driven.
Residual lease: Conflict between dealer and customer is not rare
For residual value leasing, the contract specifies how much the vehicle should be worth at the end of its term. It is determined if the scratches in the paint and stains on the covers nor the normal wear and tear, or if there is excessive use. Often it comes to a dispute between dealers and customers. In this case, an independent assessor must decide how much the car is worth.
If you're leasing a car and the car gets a lower revenue than planned due to many signs of use, you'll need to make up for the loss. So you carry the so-called residual value risk. This is the most common dispute with this variant of car leasing. In practice, it has happened that dealers have set the residual value of the vehicle before the rental so high that he had to turn down at the return, so that the customer had to make a back payment.