What is financial leasing?

Main charecteristics and especialities of financial leasing.

What is financial leasing?

When it comes to renting a car, you often hesitate and cannot choose the type of leasing you need depending on the purpose. Financial leasing is the most comfortable and flexible in terms and conditions. Also depending on the situation, it can be an excellent option for you or your business

Why financial leasing?

When you do business, then flexibility is the key goal of success no matter how big your business is. If you have a business that requires the use of a car, but not enough funds to purchase it, then financial leasing will be the best solution.
How does financial leasing work?
If you choose a financial lease, it means that you accept all the conditions. If you are a sole proprietor, then financial leasing is also available to you.
Financial leasing is payment for using a car for the period of a certain rental period. The actual cost of the car is much higher. In the end, the car remains with the lessor, if you do not want to buy it at the end of the contract.
Like most leasing options, financially paid monthly. These costs are determined by analyzing the original cost of the vehicle, the duration of the lease, the total cost and the amount of the final payment. Many people believe that this is based on the final cost of the vehicle, but it is not.
Since the total cost of the vehicle will be used to calculate the monthly rental costs, it is worth adhering to a certain mileage limit. After all, this value will have an impact on the final cost of the vehicle in the future. If you exceed the limit - pay more. You can also increase your mileage limit, but at an additional cost.
When you pay a financial lease, it has the full right to dispose of the car for the entire duration. After it is finished, the car can be sold to a third party or purchased by you.
The sale price may be higher than planned. In this case, you get a percentage of the profits for the sale. It completely depends on the sale price.

Whom is a finance lease suitable for?

By choosing financial leasing, you can protect yourself from the pressure that comes with buying a new car, because the monthly payments will be much lower. This is a great opportunity to give companies access to a range of vehicles with new technologies and better performance. When you choose a financial lease, you get a huge amount of benefits. This makes it an ideal vehicle financing option for businesses. To make this process simple, the lessor can offer the business to pay the full cost of the vehicle. This includes any interest and lease terms. Depending on the circumstances and the company's solvency, a secondary lease may be offered, which will be much cheaper than the first time.

The main advantages and disadvantages of financial leasing.

Positive aspects of financial leasing:

  1. One of the most attractive reasons why a company leases a vehicle is low monthly payments compared to buying a new car. Initial costs are also much lower than other rental options.
  2. Financial leasing provides the most flexible conditions for business owners. There are various payment options that fit any budget. You will have the opportunity to reduce the monthly rent, make a deferment of payment, or pay the entire cost of the car in monthly rent payments.
  3. With financial leasing, you can get access to the latest car models for a low monthly payment. After the end of the contract, you can choose another model or redeem the one you used.
  4. Possibility to rent a premium car. This is quite realistic, because the higher the cost of the car, the lower your monthly payments will be. This will allow you to buy a car that you previously could not afford.
  5. Lower payouts. Financial leasing implies a lower monthly rate than other lease agreements, which makes it more affordable.
  6. Financial flexibility. With a financial lease agreement, you can save money for other purchases, because, as a rule, the initial payment for 3 months is much lower than with the purchase.
  7. Asset for your company. If you own a business and want to keep a car, this will be a great way to purchase it, since monthly payments are easy to manage throughout the rental period.

Several disadvantages of financial leasing:

  1. Transport tax. It is often not included in the rental price.
  2. Risks when owning a vehicle. After the end of the rental period and the purchase of the car, you have to pay for maintenance, repair, in case of need or depreciation of the vehicle, if it drops significantly.
  3. Final payment amount. This is not an additional charge when buying a vehicle at the expiration of the rental period. If your car lost in value during the rental period, then it is possible that you will pay more than the actual residual value.

What documents are required for financial leasing?

You should check this on our website in "Financial leasing" section. Or just leave us a note in feedback form.

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