Basic elements of a vehicle leasing

More and more companies choose to stop buying cars for rent. That’s why renting are more fashionable than ever. This article will explain the main features of such car lease.

Basic elements of a vehicle leasing

A very typical advice from someone who knows nothing about cars is to recommend to those known to do many miles a year to hire a lease. The laymen think it means to be renewing the vehicle every so often, which only care about those drivers who are all day on road. They tend to assimilate mistakenly renting with Fast car at lowerprices.

The first thing to understand is that this method is based on a lease medium to long term by which a customer instructs a bank or a leasing manager that provides a vehicle for certain characteristics for a given time. Along with the cost of rent, the tenant will pay a single fee all expenses relating to maintenance: insurance, taxes, oil changes, tires. Once finished the contracted period, you will usually be returned the vehicle and signed a new contract.

Regarding the miles, all lease contracts specify a maximum amount not be exceeded. It is therefore understandable that drivers are more than those who make more pay, since reimbursed the car with more wear, which lowers the residual value. This theme is also very delicate: if a user moves from the amount agreed upon, be penalized financially. I know some people ill-advised if he had to stop using the car in the middle of the cycle because you had covered all the mileage contract.

Who would want to do a lease? Generally, accountants and avoiding having to reflect on the balance the supply of goods to be valued and depreciated. Moreover, for companies with a very largefleet, often cumbersome to be aware of the inspections and services of each unit and associated payments. If a company has 20 vehicles, each time you need to attend the workshop, you must authorize a payment, generating a cash outflow. However, with the lease, you only have to pay and account for the rental fee.

Many will wonder if it is cheaper or not. In my opinion it’s more expensive, since it will end up paying interest on all costs of the car. Although it is true that manufacturers have established a discount much higher for these sales. So it is best to ask simulations accounts and the various suppliers. It is also knownthat several cases of companies with auto mode prefer renting because it grouped all payments into one share, have to make large outlays, achieve greater tax benefits and may renew their fleet at short intervals.

There are many questions about whether individuals (employees) are eligible for leasing. Although it makes little sense because they lack the tax benefits that do get self-employed and businesses, the law prevents it.

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