Leasing a car is becoming a more popular choice over buying. Here we tell you what it’s all about and its benefits.

Leasing is a medium- to long-term agreement under which the lessor — usually a specialist company or financial institution — lets an item to the lessee for a monthly fee. It’s a popular arrangement for cars that is taking off the world over. According to Asociación Española de Renting de Vehículos (Spanish vehicle leasing association, or AER), car leasing is up 34% year-on-year in Spain.

What’s the deal? Benefits and pitfalls

Many individuals and companies ask themselves should they buy or lease when looking for a new car. While it largely depends on their needs and preferences, it’s handy to know what leasing offers as an alternative to buying. The key features of car leasing are:

• Services: Monthly fees usually include insurance, roadside assistance, repair and maintenance (as long as damage is not due to negligence), taxes and online operations. Fuel and cleaning are normally excluded. The driver will also foot the bill for any traffic violations.
• Term: Given customers’ shifting needs and demands, companies have become more flexible when it comes to the duration of the lease. Some may only last a matter of months; some a year; and others up to five years. Terminating the agreement early often carries a penalty. 
• Ownership: Though the vehicle belongs to the company or financial institution, they tend to offer several options like extending the lease agreement; swapping the vehicle for a new one; or acquiring the vehicle.  
• Other interesting features: Many lease agreements include a maximum mileage. If the lessee goes over the agreed amount, they will either have to pay the difference at the end of the term or pay a higher monthly fee. 

Leasing will continue to gain popularity in the future due to individuals and businesses’ thirst for newer and bigger vehicles and its increasing prevalence over buying. 

In Spain, we lease cars through Santander Renting and, for younger people, through Santander SmartBank. What’s more, Santander Consumer España’s Wabi is a subscription-based leasing model with no minimum contract.

Santander México’s leasing service is called Arrendamiento Puro, while Santander Chile has several lease plans to suit customers’ needs.