At 47% Russian families have a car. According to a VTsIOM survey, this figure has grown by 10% over eight years. In 2006, only 37% of respondents had a car in their family.
According to the Automakers Committee of the Association of European Businesses (AEB), almost three million new cars were sold in Russia in 2013. In 2014, sales decreased by 8%, but there is still demand.
Plans to purchase a four-wheeled iron horse» students (23%) and housewives (25%) build more often than others. It is not surprising that every second new car in Russia is purchased on credit.
The popularity of car loans is explained by the fact that it is difficult to save up and buy a car for cash. But there is another financial instrument that makes the dream of a car come true. This is leasing.
Car leasing is a popular way of purchasing a car in the USA and Europe. There, up to 30% of cars bought by private individuals are leased. In Russia, this figure is negligible. Why?
Let's analyze the mechanisms of car loans and car leasing, weigh their pros and cons and try to understand what is still more profitable.
car loan
A car loan is an interest-bearing loan issued by a bank or other credit institution to an individual for the purchase of a car.
This is a popular type of consumer lending. Peculiarities:
- This is a targeted loan: money can only be spent on buying a car.
- This is a secured loan: the car remains pledged to the bank until the loan is repaid.
Legal regulation of car loans is carried out Civil Code(Chapter 42), the Law "On Banks and Banking Activities" (dated December 2, 1990), the Law "On Consumer Credit (Loan)" (dated December 21, 2013) and other regulatory acts.
Types of car loans
There are various loan programs for buying a car:
- "Classic" (More details below);
- Express loan: simplified procedure, but high interest rates;
- Loan with buyback (BuyBack): part of the loan is “frozen” and paid at the end of the term of the contract either by the borrower or by the car dealer, provided that the proceeds are credited for the purchase of a new car;
- Trade-in: exchange of an old car for a new one with a surcharge. The cost of a used car is offset by the cost of a new one;
- Factoring (interest-free loan): 50% of the cost of the car is paid, the rest is paid in installments;
- Loan with no down payment: when lending from a car dealer, the absence of a down payment can be a bonus.
In addition, we can talk about loans for used cars and loans without insurance as separate areas.
Car loan mechanism
Most often they resort to classic car loans. Let's take a look at his diagram.
You want to buy a car. There is no money for a new "iron friend". You go to a bank or a mortgage broker.
A loan broker is a commercial organization that acts as an intermediary between a borrower and a lender (a bank or a car dealer). Assists in the approval and processing of a car loan.
Car dealers can also act as lenders. They provide loans from their own funds or cooperate with banks.
You choose a bank (or a car dealer), study the terms of credit. Having decided, fill out the questionnaire and collect documents. The bank needs to make sure that you can repay the loan (solvency) and that you have no other debts (credit history). For several days, the bank thinks whether to issue a loan or not.
If the decision is positive, the bank and the borrower (now you) enter into an agreement. It specifies the term, interest, down payment, rights, obligations and responsibilities of the parties.
All the hassle of car registration falls on your shoulders. Also, most often the loan agreement provides for insurance at the expense of the borrower. And not only OSAGO, but also CASCO.
You are a happy car enthusiast! The main thing is to carefully repay the debt and do not forget that although you are the owner, the car is pledged to the bank. You not entitled to sell, give away or exchange. And if hard times come and there is nothing to pay on the loan, the bank (car dealer) will take your "swallow".
Pros and cons of a car loan
A car loan, as a financial instrument, has its advantages and disadvantages.
- You can have a car without capital. Only a few can buy a car for cash, but saving for a long time and not always works.
- Big choice. You can buy what you like, not what you have enough money for.
- A variety of lending programs: you can choose the most profitable for yourself (with minimum term or, for example, without a long registration).
- Complicated procedure. Strict requirements for the borrower.
- Increase in the cost of a car. You will have to pay interest + mandatory insurance.
- Car deposit.
Car leasing
The word leasing comes from the English lease - "rent". But in Russian law Leasing is not the same as renting. We have it view lease relations. In them, one party (the lessor) invests cash into the purchase of property, and the other (the lessee) accepts this financial service and uses the purchased property.
Leasing legal relations are regulated by the Civil Code (Chapter 34), as well as by the Federal Law “On Financial Lease (Leasing)” dated October 29, 1998.
The subject of leasing can be any non-consumable things (except land), including vehicles.
Autoleasing mechanism
Car leasing is the purchase and transfer of cars for temporary possession and use for a fee on the basis of an agreement between the lessor and the lessee.
The general scheme is as follows.
you want a car. There is no money to buy. You apply to a leasing company. You tell them what kind of car you would like to have and show some papers.
Unlike a loan, the package of documents is minimal. As a rule, this application, passport and driver's license. From a procedural point of view, leasing is much simpler than lending.
An agreement is concluded between you and the leasing company. From now on, you are the lessee.
Currently, the lessee can be both legal entities and individuals - NOT entrepreneurs.
Until 2010, the Law "On Leasing" contained a clause according to which the leased asset could only be used for commercial purposes. In leasing, they took mainly buses, trucks and agricultural machinery. Financial lease passenger transport practically non-existent.
But now there are leasing programs for citizens, according to which they can get any car for use. Currently, only three companies are engaged in leasing for individuals in Russia.
After the conclusion of the contract, the lessor buys a “dream car” for you and transfers it to you for use.
Keyword - use. The owner of the car is the lessor. In this regard, it is he who is engaged in registering the car, passing technical inspections and other chores.
It should be noted that all additional expenses incurred by the lessor (insurance, taxes, etc.) are ultimately paid by the lessee, as they are included in the lease payments.
Leasing payments are usually less than loan payments. The fact is that they are calculated minus the so-called residual value.
Residual value is the redemption payment for the car, which the lessee must pay at the end of the lease term in order to get the car into ownership.
Also, the amount of payments is affected by the presence / absence of an advance payment and its size. In other words, the more you pay at the beginning and at the end, the less you have to pay monthly.
During the leasing period (from one to five years) you are a happy car enthusiast. The main thing is not to forget to make monthly lease payments and remember that at the end of the contract you will either have to buy the car or return it.
Types of car leasing
There are two auto leasing schemes:
Pros and cons of car leasing
Car leasing saves you a lot of hassle. For example, you do not need to waste time searching for a seller and car registration. And this is not the only advantage.
- More flexible payment schedule. As a rule, they are lower than loan installments.
- Simplified procedure for collecting documents and concluding an agreement.
- The ability to update the car every few years.
- The car is owned by a leasing company. At the slightest problem with payments, as well as financial difficulties of the lessor himself, it can be withdrawn.
- The vehicle user cannot sublease it.
- Individuals do not have tax preferences for car leasing.
Automotive arithmetic
Knowing the mechanisms of car loans and car leasing, the main question still remains: “Which is more profitable?”.
To answer it, we asked Leasing Trade to compare the costs of leasing for individuals and a car loan under equal conditions. Here's what happened.
"Property was chosen - Toyota car Corolla 2014 release, cost 690,000 rubles (sedan; engine power - 1.6; 122 hp).
We took standard car loan calculations: the loan amount is 690,000 rubles, an advance payment of 20% or 193,800 rubles, a period of 36 months. We took the calculation of a car loan from one well-known bank (let's call it X) as a basis. The interest rate on its lending program with a standard set of documents is 15% per annum. The calculation was made without taking into account financial protection programs, OSAGO, CASCO and additional expenses.
The calculation of leasing for individuals is based on the offer of one of the leasing companies (let's call it Y). The monthly payment did not include OSAGO, CASCO, as well as mandatory and related payments (transport tax, vehicle registration with the traffic police, annual maintenance, etc.).
Car maintenance costs will be approximately equal in both cases, are mandatory and calculated separately.
CASCO and OSAGO insurance was made based on the following parameters:
- OSAGO: 5,500 rubles; region - Kazan; driver's age - over 22 years; driving experience - more than 3 years; car power - 122 hp One driver is allowed to drive.
- CASCO: 86,000 rubles; place of registration of the vehicle - Kazan; information about an individual: male, 30 years old, marital status - married, one child; driving experience - more than 6 years, accident-free driving. One driver is allowed to drive.
| car loan | Car leasing | |
| car cost | RUB 690,000 | RUB 690,000 |
| Interest rate | 15% | |
| Term (in months) | 36 | 36 |
| Initial payment 20% | RUB 138,000 | RUB 138,000 |
| Payment type | uniform | uniform |
| Monthly payment | RUB 19,135 | RUB 11,790 |
| Interest overpayment | 135 000 rub. | no, as the car is being returned |
| The total amount of payments = the amount of payments under the agreement (credit / leasing) + advance payment | 688,860 + 138,000 = 826,000 rubles | 424,440 + 138,000 = 562,440 rubles |
| Security deposit | 0 | 0 |
| CASCO insurance | RUB 86,000 | RUB 86,000 |
| OSAGO | 5 500 rub. | 5 500 rub. |
| Registration of the vehicle in the traffic police | 2 000 rub. | 2 000 rub. |
| Transport tax | 4 270 rub. | 4 270 rub. |
| Minimum income to buy | 31 900 rub. | 31 900 rub. |
| Market value of the car at the end of payments | RUB 539,000 | 0 |
| Advance redemption payment | absent | RUB 441,000 |
| The cost of buying a car | RUB 826,000 | 562,440 + 441,000 = 1,033,440 rubles |
»
Thus, if we consider the option in which leasing does not provide for the transfer of the car into the ownership of the client, then monthly payment under the leasing agreement will be lower by 7,345 rubles (that is, by 38%). Property insurance costs will be equal in both cases and are mandatory.
But if we take a situation in which a car is purchased for the purpose of long-term (up to 5 years) operation, and in the case of leasing an individual and then repurchasing ownership, then, undoubtedly, a car loan will be a more cost-effective and cheaper way to get a car. Since the acquisition costs (excluding insurance and mandatory expenses) will amount to 826,000 rubles for a car loan against 1,033,440 rubles for car leasing.
At the same time, our expert draws attention to the fact that:
- by mass and popular brands(Kia, Opel, Nissan, Mitsubishi, Chevrolet) and premium (BMW, Audi, Mercedes-Benz, Porsche and others) discount of leasing companies can be on average 10%, which allows you to make calculations much lower (often twice) than on a car loan.
- for premium clients high level Income leasing will be a profitable and comfortable service, since it is possible to include insurance, tax payment, car maintenance and repair in the payment.
What to choose?
After the amendments to the Law “On Leasing”, many experts predicted a boom in leasing transactions with individuals. After all, it would seem that the benefits are obvious. No guarantors are needed, fewer nerves during registration, and most importantly, lease payments are not so burdensome for the family budget. But the boom didn't happen.
Comparative table of car leasing and car loans:
| car loan | Leasing for individuals | |
| Property | New and used cars | Exceptionally new cars foreign production, except for Chinese cars |
| Financing term | 12-60 months | 12-36 months |
| Prepaid expense | Banks rarely issue car loans without a down payment. Minimum advance from 15% | Advance payment from 0%, but leads to an increase in the cost of monthly payments. Minimum advance payment from 20% to 49% |
| Package of documents | Standard: passport, income statement 2-NDFL, a copy of the work book. The reduced package is more expensive at rates | Standard: passport, driver's license (sometimes also income statement 2-NDFL) |
| Car insurance | Mandatory annual insurance OSAGO, CASCO. Optional: voluntary life and health insurance, financial protection programs. It is possible to include CASCO in payments | Annual OSAGO insurance is obligatory. It is not necessary to insure CASCO, but this leads to an increase in the cost of the monthly payment |
| Ownership | The car is the property of the client, but is pledged to the bank | The car is the property of the leasing company, and the client is transferred for temporary use under the contract |
| Processing speed | You can buy a car on credit in a short time with a minimum package of documents under the Autoexpress programs. As a rule, interest rates rise by 2% | You can buy a car in a short time in leasing with a minimum package of documents |
| Mileage limit | Is not limited | Mileage limit up to 25,000 km per year |
| Other restrictions | – | Departure of the car abroad only with the official permission of the leasing company |
| Additional services and service | – | The leasing agreement may include full insurance, annual technical inspections, seasonal tire service and storage of tires, accounting features, payment transport tax And so on. All this adds up to higher monthly payments. |
| Early partial or full repayment | In loyal banks, there is usually no limit on the amount and terms | Strictly not earlier than 6 months |
| Redemption value | Absent | Adjusted based on the condition of the car, can be calculated in advance at the stage of concluding a contract |
| Seizure of property | Through the court in case of delay under the contract | According to the contract, the owner of the property is leasing company, in case of non-fulfillment of obligations under the contract, the withdrawal is made without a court decision |
»
According to experts, main reason lack of demand for leasing for individuals in Russia - in the tax system.
In the USA, where car leasing is very popular, there is a so-called “ financial statements households." That is, the budget of an individual is treated in the same way as the budget of an enterprise. In this regard, by leasing a car, a citizen receives the same tax benefits as a businessman. In Russia, only legal entities can return VAT. For them, leasing is really beneficial, as it allows you to minimize taxes. For individuals, VAT is included by the leasing company in monthly payments.
In addition, there is a significant difference in the psychology of domestic and Western motorists. “The car is not mine - they’ll just take something away, and my money was crying.” Such reasoning stops many who are looking at car leasing. Indeed, a leasing company does not even need to go to court to claim a car in case of problems. When paying off a loan, a person perceives it as a contribution to his property.
Thus, when choosing between a car loan and car leasing, it is important to understand your needs well. If you need a high-status car and you want to update your car regularly, then most likely a financial lease without a buyout will suit you. If you want a reliable “iron friend” for many years, then a loan will be more profitable.
Tell your friends about this article and express your opinion in the comments. What do you think is more profitable: car loan or car leasing?
Today we will devote our conversation to one of the topical financial services, which is called leasing. The article will be of interest not only to novice businessmen, car owners, but also to those who just want to know about popular trends in the financial industry and in business.
The concept of leasing for individuals
The essence of such a financial term as "leasing for individuals" lies in the name itself. WITH in English it translates to rent. That is why, as with renting in this case the object of the transaction is given for temporary use. However, the difference lies in the fact that when performing leasing operations, compared to traditional types of lease, the user is given the opportunity to purchase the leased asset for permanent possession in the future.
There are other differences between these two concepts. I will tell about them below.
A more rigorous definition of leasing can be formulated as follows. The leasing procedure is a complex of economic and legal relations, according to which the lessor, for a fee specified in the contract, transfers the object of leasing to the lessee with the possibility of redemption.
It should be clarified that the lessor is a bank, commercial or any public organization, and the lessee is an individual or legal entity receiving the object of the transaction.
Pros and cons of leasing for individuals
The objects of a leasing transaction can be:
- Company;
- Vehicle;
- Equipment;
- Movable property;
- construction;
- Building;
- Real estate.
In Russia, leasing of a car and specialized equipment is especially in demand.
According to the reviews of young developing companies that I have heard about leasing operations, the lease of property with the subsequent possibility of its redemption is the most best option at the beginning of the company's formation. Equipment is purchased as soon as possible.
Consider what are the pros and cons of leasing for individuals, that is, for a person as a subject of economic activity.
Today, the new financial instrument is actively competing with the traditional ways of purchasing cars, such as a one-time purchase or installment purchase, as well as rental.
There are two types of car leasing:
- With the mandatory transfer of ownership of the car
- No transfer of ownership.
When purchasing a car on lease under the first option, the buyer receives the car for rent immediately after making the initial payment, and after the expiration of the transaction, the lessee becomes the full owner of the vehicle.
A significant disadvantage of a leasing transaction is that during the duration of the transaction, the company, and not the buyer, is considered the owner of the car. The company in cases stipulated by the contract, for example, in case of delay in payment, can return its property.
The second method, in which the lessee must return the car to the company after the expiration of the contract, allows car owners to regularly change cars to newer models without thinking about selling the old car.
What is better to choose: leasing or credit
In order to understand what to choose leasing or credit, you should consider the main positive and negative sides leasing deal.
The main advantages of leasing a car for individuals are:
- Flexible payment schedules;
- Simple process of registration of the contract;
- There is no need to leave a deposit or look for a guarantor.
I will explain all the points in more detail. When buying a car on lease, in contrast to a car loan, a leasing transaction is characterized by greater variability. The buyer is given the opportunity to choose a suitable monthly payment schedule. In addition, leasing is characterized by lower amounts of payments to repay the debt.
The lessee is given a choice in advance whether to return the car after the end of the transaction, or become the full owner.
When drawing up a leasing agreement, no additional collateral is required. The procedure for checking the solvency of the client is more simplified. This circumstance significantly reduces the time of registration of the transaction.
When asked what is the benefit of leasing, I will answer as follows: leasing saves time for car owners and frees them from a lot of trouble. This is not the least important for business people.
Disadvantages of leasing:
- The owner of the car during the term of the contract is the company. That is, the lessee does not have the right to sublease the car.
- There are no tax incentives for the purchase of a car on lease for individuals.
- In case of financial difficulties of the buyer, the company seizes the car.
- The beneficial scheme applies to cases where the return of the car is provided.
My opinion about leasing for individuals
In my opinion, the benefit of leasing is completely determined by the features of the contract and the types of leasing transactions. The financial advantage for each case individually, depends on the terms of the agreement.
When choosing a financial instrument for buying a car, I advise you to clearly understand your needs. For those who want to constantly upgrade the car to newer models, the option of renting without redemption is the most acceptable. car for durable it is better to buy on credit.
In the article we will analyze the pros and cons of leasing. We will find out whether it is profitable to make purchases through leasing companies for legal entities, for example, LLC. And also consider whether leasing payments are convenient for individuals.
Leasing for legal entities
Leasing is a financial instrument that allows an LLC or other organization to quite easily raise additional money for the purchase of fixed assets. But from the point of view of legislation, leasing is a lease, not a loan or credit, which leads to certain pros and cons of the service for legal entities.
The scheme of a leasing transaction usually looks like this:
- The lessee selects the necessary property and suppliers, after which he concludes a deal with the leasing company.
- The leasing company acquires the property specified in the contract and transfers it to the use of the lessee.
- The lessee makes monthly payments.
- At the end of the term of the contract, the lessee is granted the right to buy out the leased items at the residual value.
Although leasing approval is easier than obtaining a positive decision on an application for a bank loan, you need to weigh the pros and cons. And then you can move on to making a deal.
Advantages of leasing
Initially, leasing was aimed at business representatives. It is legal entities who get the opportunity to take advantage of all the advantages of this product and get the greatest benefit.
Consider the main advantages of leasing for legal entities. persons:
- Reducing tax payments. From a legal point of view, leasing is a form of lease relations, all payments under the agreement can be used by the lessee to reduce the taxable base for corporate income tax. VAT included in lease payments is also fully refundable. You can also use the mechanism of accelerated depreciation of leased items.
- Maintaining investment attractiveness. Leasing agreements do not show up on a firm's balance sheet like loans or credits. This allows you to use leasing to acquire fixed assets and at the same time attract money from credit institutions to replenish working capital.
- Ability to upgrade or purchase fixed assets without large one-time costs. Leasing allows you to quickly obtain the necessary property for the development of the current or opening a new line of business, while the organization does not need to withdraw significant amounts from circulation. The down payment on a lease can be relatively small.
- Deal structuring. Within the framework of one transaction, a variety of property and additional services can be acquired. This allows the client to get turnkey solution Full construction. Most leasing companies in this case can take on issues related to customs clearance, delivery of leased items, etc.
- Opportunity to participate in various government subsidy programs. The government is trying to support Russian manufacturers various equipment and equipment, as well as representatives of small and medium-sized businesses. Participating in special programs, you can significantly reduce the overpayment for leasing services or even reduce it to zero.
- Risk Sharing. The claims of the lessee's creditors cannot lead to the loss of the leased items. Until the end of the contract, it is the property of the leasing company.
Cons of leasing
Alas, leasing also has negative features. First of all, they include increased risks. If at the planning stage the lessee does not carry out a financial analysis of his future activities, then there is a big risk of losing both the leased asset and the payments already paid. To seize property, a leasing company does not need to obtain a court decision, but simply terminate the contract.
The following disadvantages of leasing should also be noted:
- Often high fees. The rate under the agreement usually turns out to be no lower than that established for similar bank loans. Due to insurance and other mandatory paid services, the overpayment increases significantly. However, the leasing agreement is concluded individually with each client, and all conditions can be discussed even before signing it.
- Relatively few offers on the leasing market. In some regions, there are only a few leasing companies, and their conditions may not be the most favorable. But often this problem can be solved, since many Moscow leasing companies work with clients from anywhere in the Russian Federation.
Is leasing beneficial for legal entities?
Often only leasing allows legal entities, especially from among small and medium-sized businesses, to attract the necessary amount of financing.
It turns out to be more profitable than simple loans with the proper approach of the client to the analysis of his own financial situation, development planning and taking into account possible force majeure situations.
Leasing for individuals
Leasing for individuals is practically no different from a similar service for organizations. By signing a leasing agreement, the client actually takes the transport or other property in long term rental. At the same time, the agreement also provides for the right of the lessee to redeem the leased asset at the residual value after the expiration of the contract.
Until 2010, leasing in Russia was not available to individuals. But at present, such an opportunity is nevertheless provided, although not all companies provide such services. Individuals can only lease vehicles and sometimes real estate.
Advantages of leasing
Leasing does not provide tax incentives for private clients. However, certain advantages of leasing for individuals still exist, and they need to be known.
Here are the main positive aspects associated with leasing services for individuals. persons:
- Simplified design. The lease agreement may include both the use of the property itself and additional services: from insurance of the object of leasing to tire service. A deal for individuals is agreed quite quickly - a maximum of 1 day.
- Increased chances of a deal being approved. The risks of a leasing company are lower than those of banks. After all, the subject of leasing is its property until the final redemption. Due to this, lessors often approve the application of those customers who have been refused by the bank.
- Opportunity to get a discount from the manufacturer or dealer. Leasing companies are actively working on concluding partnership agreements. As a result, their customers can purchase cars or other property at discounted prices.
Usually, it is not easy for individuals to come to terms with this state of affairs, but for certain categories of civil servants, this is the only way to get the necessary property for use without registering it for themselves and without violating the law.
Cons of leasing
The main drawback of leasing for individuals is the need to strictly comply with all the terms of the agreement, especially in terms of making payments. If the bank only accrues penalties for an overdue payment for 20-30 days, then the leasing company may in this situation declare the termination of the contract. In this case, the subject of leasing will be withdrawn from the lessee, and payments already made will not be refundable.
Additionally, you should also pay attention to the following disadvantages of leasing for individuals:
- Difficulties with early payment. You can always repay the loan ahead of schedule and get a recalculation of interest. Under a lease agreement, pay off earlier due date with the recalculation of the overpayment, the client can only with the permission of the lessor. Often a fine or additional commission is taken for such actions.
- Pretty high stakes. For individuals, they can reach 12-18% per annum, which is comparable to consumer loans.
- Prohibitions and restrictions. It is possible to lease the acquired property only with the permission of the lessor, and it is rather difficult to obtain it. Vehicles received under a leasing agreement are often subject to restrictions on mileage, territory of operation, etc. Any violation of the agreement with the leasing company will again lead to a minimum fine, and a maximum to termination of the agreement and seizure of the leased asset.
Is leasing beneficial for individuals?
Leasing for individuals is often used by clients who, for some reason, cannot get a bank loan. This is usually due to the inability to officially confirm income or the presence of special restrictions on the part of the law.
Only with a responsible approach to the choice of a lessor, an individual will be able to arrange a lease for a valid favorable conditions X. But even in this case, you need to pay attention to the analysis of your own financial capabilities. After all, in case of delays, you can easily lose both property and money.
In this article, we will look at the pros and cons of car leasing. We will learn about the features of leasing for an LLC and analyze what benefits legal entities will receive from purchasing a car. And also in the article you will find brief recommendations on the registration of property in leasing.
Even in 2018, leasing issues remain far from the most transparent for many clients, despite the huge number of offers both in Moscow and in the regions. Most don't even know what it is. In fact, leasing is one of the options for rental relations. It is no coincidence that it is also called a financial lease.
According to the leasing agreement, the lessor company purchases a car and leases it to an LLC, individual entrepreneur or individual, that is, to the lessee. The client gets the opportunity to use the machine almost without restrictions. At the same time, he is obliged to make monthly payments under the leasing agreement. Only after all contributions under the contract are made in a timely manner, the lessee will be able to buy the car at the residual value and register it for his organization or as an individual.
Often it is leasing that becomes the only real opportunity to find finance for the purchase of vehicles. After all, even for legal entities, buying cars is a rather serious expense. Of course, bank loans can be considered as an alternative, but for individual entrepreneurs and small firms, their execution is very difficult.
Expediency financial lease must be assessed in each case individually, because car leasing has its pros and cons.
Only after analyzing all the points and conducting negotiations with the leasing company, it is worth making a decision on concluding an agreement.
Advantages of leasing a car
Purchasing a car on lease is an excellent solution for business representatives. It is this category of customers that receives the maximum benefit from such contracts.
Consider the main advantages of leasing a car for business:
- No need for additional collateral. Business loans are available only with collateral, and an entrepreneur or organization may simply not have suitable property. As part of leasing programs The leasing object itself will act as collateral.
- Tax Savings. All lease payments can be included in expenses, resulting in a reduction in income tax. VAT on payments is also fully refundable.
- Maintaining investment attractiveness. Leasing refers to rental relations, which means that the amount of loans in the balance sheet will not increase. This makes it easier to obtain further credit funds for other purposes, for example, to replenish working capital.
- Ease of obtaining. It is quite difficult for representatives of small and medium-sized businesses to get approved for a loan. Leasing companies make a positive decision on transactions much more willingly, because until the end of the contract, the subject of leasing is their property.
- Rapid expansion or renewal of the fleet without large expenses. The initial payment for car leasing programs ranges from 0 - 20%, which allows you not to withdraw large amounts from working capital.
- Special conditions for purchase. Many leasing companies work closely with dealers and car manufacturers, so additional discounts and special prices for some car models are available to customers.
Cons of car leasing
The main disadvantage of leasing is the increased risk for the lessee. Even one late payment can cause unilateral termination contracts and withdrawal of the car. At the same time, already submitted leasing agreement advances and payments are non-refundable.
It is necessary to exercise special care and constantly monitor compliance with the payment schedule.
And in an unstable economic situation it is quite difficult to predict your income for several years ahead.
Unforeseen financial difficulties can become a problem for individuals who have issued a lease. Unlike a bank, which can only get by with late payment fines, a leasing company will terminate the contract almost instantly. She does not need to get a decision to seize the car at all. judiciary, because until the end of the contract, the subject of leasing is its property.
The reasons for unilateral termination of the contract may also be violations of the conditions of insurance or operation of the car. Availability additional requirements and restrictions on these parameters can also be attributed to the negative features of leasing. This is especially true for leasing for legal entities. The client has to bear additional expenses to monitor compliance with the operating conditions of the car specified in the contract, because in most cases several people use it.
Is it worth leasing a car?
Leasing is well suited for business representatives who are confident in the future stable financial position your company. For them, such transactions, even at higher rates, are more profitable than bank loans due to tax savings.
But even they should carefully study the terms of the contract, especially in terms of early redemption car from the lessor.
It makes sense for individuals to consider leasing only if it is impossible to obtain a regular bank loan or in a situation where registering a car for “physics” is very undesirable. Last situation sometimes occurs in government employees.
Modern motorists are really incredibly lucky. Anyone wishing to purchase vehicle movement can choose to buy on lease or take the money on credit for the purchase. We offer to find out what leasing is, what advantages it has and whether there is operational leasing.
Leasing - what is it?
Often, those who want to get a loan are interested in what leasing means. This term is understood as a certain type of investment activity aimed at acquiring property, as well as transferring it on the basis of a special leasing agreement to both legal entities and individuals for an agreed fee for necessary period and on right conditions that are stipulated by the contract. In this case, the recipient of the lease, if desired, can redeem the property. There is leasing of real estate, a car and other necessary objects.
How does leasing work?
For some, the concept of leasing is complex and not fully understood. However, in reality, the mechanism of this type of investment activity is simple and looks like this:
- The lessee must apply to one of the well-known leasing companies with his application for the necessary equipment.
- The company providing this service will undertake to assess the liquidity of a particular operation, after which equipment will be purchased from the distributor or manufacturer.
- When the lessor has already become the owner of the equipment, he can transfer it to the use of the client for a certain period, for which he will receive periodic payments.
What is car leasing?
Relatively new service on modern market is car leasing. Every day he has a lot of fans. This method purchases of transport can be called very convenient and even profitable, since a person rents a car and has the right to buy it in the future. This service has gained popularity among legal entities for whom it is convenient to make purchases using several payments. For the population it unique opportunity use the car after the package of documents is completed and the down payment is made.
Leasing - pros and cons
This type of investment activity cannot be called unequivocally positive or insufficiently acceptable. Leasing has its advantages and disadvantages. One of the significant advantages of leasing is that there is no need to leave a deposit, which will certainly appeal to every client. Its disadvantage can be called a high overpayment in comparison with loans.
Advantages of leasing
Many clients of specialized firms know what leasing is and they know what the benefits of leasing are:
- Low tax rate and the ability to insure on acceptable terms.
- The client can repay the lease ahead of schedule before the end of the contract without significant overpayments and losses.
- If desired, the loan can be partially repaid. In this case, the balance of the amount is recalculated for a shorter period.
- In some cases, insurance is optional, and sometimes it is one of the main criteria.
- The best solution in cases where you need to purchase new equipment or a car as soon as possible, and there is no such possibility to reduce the speed. So you can continue to reinvest profits and develop the business, paying the same parts of the total amount.
- There is no need to leave a deposit.
Cons of leasing
Speaking about the advantages of this type, it is important to dwell on the cons. Experts identify the following main disadvantages of leasing:
- High overpayment. If we take it in comparison with other forms of lending, then the overpayment here is significant.
- Not a very rich market for leasing services. In some regions and cities it is difficult to find a company providing such services.
What is the difference between leasing and renting?
Such concepts as rent and leasing are forms of financial relations between legal entities, where one party gives another property for temporary use. In this case, the following differences are distinguished:
- During leasing, the object of the transaction must be redeemed, and when the lease expires, it is returned to the lessor.
- It is customary to conclude a leasing agreement for a very long term, and one object is the property of one lessee. The same cannot be said for rent.
- Land plots can be rented, but not leased.
How is leasing different from a loan?
Those who want to become the owner of any property on favorable terms are often interested in what is the difference between leasing and a loan. Experts call such main differences:
- The subject of the contract in leasing is property, and in lending - cash.
- The owner of the lease is the leasing company, and the owner of the loan is the client.
- Leasing provides financial incentives, while lending does not.
- Leasing can be suitable for both legal entities and individual entrepreneurs and lending is available to individuals.
Leasing or credit - which is more profitable?
Loans and leasing have their pros and cons. There are such main advantages of leasing:
- The time for making a decision and processing a transaction is much shorter than with lending.
- The lease agreement is for longer term than with lending.
- Exist various schemes repayment of lease payments.
- The company assumes the costs of paying customs duties and insurance.
- When leasing, there is no need for property tax.
- The lessee has the right to exchange the car, terminate the contract and return the vehicle.
