What is car leasing?
Car leasing is a peculiar form of financing that helps to get the chosen car for your use without much effort. The subject of leasing can be any things, ranging from transport, houses, apartments and ending with factories. In different countries, leasing has its own tax sequence. In Russia, everything is as follows.
In terms of its structure, leasing is very similar to an ordinary loan, but there are still some differences. So, let's consider what car leasing is and what are its advantages and disadvantages over a loan.
Leasing or loan?
The main difference between leasing and credit is that when buying a car through leasing, it remains the property of the leasing company, and the client only uses it and pays monthly installments. And only after the client makes the last payment, the leasing company has the right to sell this car to the client for a symbolic price. When buying through a loan, the scheme is different: after the first installment, the car becomes the property of the client.
For individuals, leasing, compared with previous years, has significantly improved and softened. For example, companies started offering leasing programs in which income certificates are no longer needed, and rates have dropped significantly.
If we consider the tricks of interest rates, we can see that some leasing companies provide an all-inclusive service, i.e. if you buy a car on credit you have to pay out of your pocket for registration and insurance, then the leasing companies take it upon themselves. It is almost impossible to refuse such offers, but if you study everything in detail, then in fact you make all the payments yourself, only they are divided into regular monthly contributions, and, of course, with interest.
For example, what is the monetary difference between a loan and a lease on a car of $ 30 thousand? When lending for three years, the price goes $ 41-43 thousand, for the same period of leasing will be $ 43-44.5 thousand.
Also, leasing companies in case of debt can pick up the vehicle. Unlike leasing, creditor banks are not allowed to pick up the car, the whole procedure is delayed, since the car is owned by the client. In this case, only by a court order the bank can receive funds.
The advantages of leasing
Leasing has its advantages, for example:
- the buyer has the right to choose any car (except domestic and Chinese);
- buying a car, a person does not register;
- all insurance claims (for example, an accident) with a car are taken by the leasing company;
- the customer is able to temporarily use another supplied machine in case of a malfunction first.
The leasing company, by and large, is interested only in timely payment of the payments made.
Disadvantages of leasing
In addition, there are some disadvantages:
- car loss. This situation can happen when the client stops making payments under the contract. And then the company has the full right to call the client and pick up his car, and in this case, all previous payments are burned. Here it is enough just to delay the payment for one month, and the guarantee that they will take away your car is almost 100%.
- changes in the exchange rate or fall of the national currency. Here, the buyer assumes all costs of devaluation.