What is more profitable leasing or car loan – Lease or car loan , what a way to purchase commercial vehicles better? This question is not for nothing that excites business executives . For the purchase of cars and machinery at the expense of the company will need to withdraw from circulation the impressive sum of money. Such a tactic would inevitably lead to the inhibition of the entire business process that may be detrimental to the promotion of a competitive market and lead to loss of advantageous positions . As a result , so hard -established business organization will lose the ability to expand further . And you may have to reduce the scope of its operation.
Similarity leasing and auto loan
Lease or car loan that issue better? To decide , you need to consider in detail the options for acquiring these two vehicles with the gradual monthly payment of its value. Both of these methods without paying the full cost of the vehicle or machinery allowed to get instant access to their use , which include the extraction of some profit in their operation .
Any entrepreneur sees great benefits of the possibility of using vehicles in business without investing in a circulating assets. Car , becoming part of the sales process , will bring some income , part of which will go to pay monthly share of its cost . All benefits available!
What is leasing ?
Leasing – the acquisition of a vehicle or machinery through an intermediary ( the leasing company ) , which is a lease agreement providing for the payment of the cost of the vehicle and the subsequent repayment of monthly anniversaries who buys trucks lessor , according to the approved schedule . Until the complete calculation of the lessee for the car, it remains the property of the leasing company .
In fact , the lessee until full repayment of the cost of its construction equipment lessor leases for certain leasing agreement fee. This fixed sum on a monthly payment , called appreciation .
Time vehicles remain in the possession of the leasing company , and she cares about its safety. Payment of taxes, repairs and maintenance of the vehicle borne by the lessor .
What is a car loan ?
Car Loan – this banking product , which is in debt to the borrower issuing a sum of money constituting part of the cost of purchasing the vehicle under certain conditions. All requirements of the credit institution to borrower and loan repayment terms are defined in the contract auto loan .
Vehicles immediately after the acquisition is made in the property to the borrower. A bank guarantee for the repayment of car loans for a car or imposes special equipment encumbrance . But this does not mean that just bought trucks , acting as collateral, will be removed from its new owner .
And if the owner of the transport company has every right to use it for commercial purposes , and therefore subject to wear and risk of being a party (and maybe the culprit ) accident , there is nothing to even dream that there will not pay a car loan at Hull . Making insurance purchased and pledged to the bank issued in vehicles , as well as the life and health of the automobile owner – borrower is a requirement of almost all auto loan programs .
Pros and cons of car loans
Like any process of issuing loans in bank debt , car loans has its advantages and disadvantages.
The advantages include
opportunity not to pay the entire cost of transport immediately , but only to repay the initial installment within 10 – 50% % of the price of the car;
the opportunity to immediately become the owner of the car;
payment of monthly installments of credit share of small size ;
the duration of the repayment period set by banks from 1 year to 7 years ;
availability of special and preferential programs for car loans , enabling low-cost acquisition of vehicles with low prices and the partial repayment of the loan by the state.
Let us pay attention to the disadvantages of car loans
requirement of a bank Delinquency unblemished credit history;
imposition of burdens on motor vehicles , which limits the possibility to use it fully ;
car insurance requirement ;
duration of registration and the need to collect a thick packet of documents , including documentary evidence when an enterprise is constantly profits.
Thus, we examined what constitutes , and the similarities of these two ways of acquiring commercial vehicles . Now let us briefly analyze the differences.
Deciding on leasing partnership with a commercial enterprise, and the subsequent paperwork and leasing agreement comes from a few hours up to 5 days. Possibility of issuing company auto loan for commercial purposes is considered a few weeks .
Set of documents when leasing is much less
Upon receipt of auto loan agreement must enclose 4 : auto loan , insurance, purchase, pledge. If leasing is only necessary to sign a lease agreement , and perhaps even insurance.
When leasing a vehicle technical support provided by the lessor. When making auto loan on maintaining liquidity car .
In the event that car insurance will cover the lessee , the lessor provides the possibility of its payment in installments without interest . With car loans is not practiced.
When making future auto loan borrower has to incur the following costs : notary fees , pay the first installment on the car loan , pay road tax , one-time commission for registration and obtaining a loan , insurance coverage , to pay for the registration of a vehicle in the SAI . Lease requires only payment of car insurance payment and the advance payment .