Leasing a car is becoming a popular alternative to buying a car in KSA. The car leasing market is experiencing significant growth due to the flexibility it offers in owning a car. Consumers are increasingly shifting their focus towards leasing, as it provides the option to buy the car at the end of the contract or switch to a newer vehicle. There are several benefits to leasing a car, including no long-term commitment, access to a variety of car models, and an affordable option for enjoying the convenience of having your vehicle.
Leasing a vehicle allows you to experience your dream car for a specific period and get a feel for living your dream lifestyle. However, renting a car means that you will have no right over the vehicle. You cannot resell or modify the car as you please. Therefore, while leasing a vehicle offers many advantages, it also has some drawbacks. However, it ultimately depends on consumer preferences and lifestyles. For an expat who plans to live in KSA for a few years, leasing a car during their stay is the best option.
Let’s dive into the blog and understand the basic requirements and step-by-step procedures for leasing a car in Saudi Arabia.
Steps to Lease a Car in Saudi Arabia
Leasing a car in Saudi Arabia is a straightforward process. You can ensure a smooth leasing process by taking careful considerations and following the steps below.
Choose a Car
Many companies and banks in Saudi Arabia provide car leasing services. You can select a car from a dealership and lease it by agreeing to the leasing company’s terms and conditions. However, before finalizing the deal, it is crucial to be aware of the details of the car model you want to lease.
If you plan to lease a used car for lower monthly payments, ensure it is no older than three years. It is essential to conduct thorough research on the leasing companies and the vehicle you want to lease. When selecting a car, consider your personal preferences and motives to make an informed decision.
Prepare Documents
Prepare the following documents to ensure a hassle-free car leasing experience.
- Residence permit (Iqama)
- Salary certificate from an employer stamped by the Chamber of Commerce.
- A valid KSA driving license
- Passport copy
- Bank statements for the last three months.
- A lease application form
- Vehicle quotation from the dealership
Leasing Companies and Banks
Numerous companies and banks in Saudi Arabia offer auto leasing services to both residents and expatriates. Each financial institution has its terms and conditions, so you need to conduct your research and then select the financier that best suits your requirements.
- Riyad Bank
- Al Rajhi Bank
- Al Jazira Bank
- Arab National Bank
- Ajil Financial Company
- Yanal Finance Company
- Ijarah Finance
Before proceeding with financing, it is essential to understand the terms of balloon and upfront payments. Most financing companies require a balloon payment at the end of the loan period, while some demand an upfront payment at the beginning. However, some companies also offer customized financing options that allow customers to choose loan tenure and monthly payments, providing greater flexibility and convenience. It is essential to be aware of these options before committing to a financing agreement.
Balloon Payment: This is the final payment that you must make at the end of the leasing contract if you wish to purchase the leased car upon completion.
Upfront Payment: Many banks require applicants to make an upfront payment initially, and a specific monthly payment must be set according to the total amount of the leasing contract.
Therefore, it is essential to read and sign the agreement carefully. You cannot lease a vehicle worth more than SAR 5,00,000.
Eligibility Requirements
Ensure that you fall under the eligibility criteria of the leasing institute to ensure a smooth process.
- Applicants must be at least 21 years old.
- The minimum net salary should be SAR 4,000.
- The leasing period is from 2 to 5 years.
- You can lease a maximum of 3 cars.
- Ensure the vehicle is insured.
Application Process
Once you have collected all the necessary documents mentioned in the blog, submit them to the financier. Ensure that all the information and documents provided are valid and that you answer all questions correctly. After submitting the leasing application, wait for approval and complete the vehicle registration. Congratulations! You now have the keys to your new car and can enjoy the comfort of driving it. If you wish to purchase the vehicle at the end of the lease contract, you can transfer the ownership from the lessee to your name.
Conclusion
Leasing a car in Saudi Arabia’s growing car market is a great decision. It’s an ideal solution for car enthusiasts who enjoy switching and trying new vehicles frequently. Leasing a car is a convenient and affordable option compared to taking out a car loan, which can burden you financially for the long term. It’s crucial to review the contract and examine the vehicle carefully to ensure that everything aligns with the contract’s terms and conditions. We hope you find the best leasing company that meets your needs and have a great time driving around the vibrant city in your new ride.
