Tag Archives: Lease

Finance

Lease Management – The Simple Yet Effective Solution to Finance Vehicles

With the intensive knowledge gained throughout the years, Lease Management has been able to sustain its stand for distributing vehicles of all type for all business and private individuals with different demands on variety of situations. They have been able to maintain extreme competitive price and measure up to a remarkable standard for 30 years. Among the acclaimed quality and services, of Lease Management is the finance, which has been known for the adaptable, consistent and reasonable solution to ones exceptional needs.

Lease management offers solutions of all kind so that everyone can enjoy financing their own vehicle. There are various options like contract hire, personal contract hire, maintenance, contract purchase and personal contract purchase.

With contract hire the company allows their vehicles to be rented with a fixed monthly rate for an amount of time planned beforehand. The company holds the right of possession the entire time period, reducing administrative burden. The same goes for personal contract hire which is designed to provide enjoyment and usage of the vehicle without the usual issues of ownership, however unfortunately, being a private individual this is a cost which has to be paid, but it’s not reclaimable.

The contract purchase on the other hand includes all the stress free benefits to that of the contract hire with the exception of the fact that at the end of the contract lease the company compromises a deal for selling it. Whereas the personal contract purchase includes all the benefits of personal contract hire but the difference is individuals are provided with a guaranteed future value.  

Moreover, these renowned preferences have tax of exclusive fixed fee which does not also take account of the maintenance charge. This is another option of whether the individual wants to keep their vehicles in check with the routine service. The fee would be added naturally to the contract.

Lease management allows the Nationwide Vehicle Leasing help with the budgeting and cash fund estimation. Improving financial balance and bringing flexibility to ones business needs, encourages many towards this solution.

Finance

Is it better to lease or finance my next vehicle?

With today’s slowing economy there are numerous promotions coming from the vehicle’s manufacturers, if you are in the market for a new car you may want to take advantage of these generous offers before the inventory is depleted. Before you sign on the dotted line you should understand some of the pros and cons when it comes to lease or finance your next vehicle. Here we will begin with the lease option first:

 

What is a lease on a vehicle – a lease is essentially a long term rental, the monthly payment you are making equates to the depreciation of the vehicle over time. “Buy out” or residual value on the vehicle is the predicted resale value in 24, 36 or 48 months.

 

Pros:

 

– Lease is generally cheaper in monthly payment because of the residual value will be paid separately which is not calculated within your monthly payment. Lease offers better cash flow, or cheaper monthly payment therefore increasing the affordability.

 

– You can claim the lease as your business expense if you have your own business registered.

 

– If you don’t want to deal with any vehicle repairs lease is the best option, since majority of lease programs fall within the manufacturer’s warranty period, leaving you with hassle free driving for years.

 

– If you can’t make up your mind about a vehicle, lease is a great way to really try out the vehicle for the 3 or 4 years term, and the ultimate decision to buy out the car is still in your hands.

 

Cons:

 

– You don’t actually have any equity in the vehicle, since you are paying the depreciation on the vehicle there is no real equity by the end of your lease term.

 

– You are responsible for the vehicle if you are planning to return it at the end of your lease term. Normal wear and tear is expected by any noticeable damage to the vehicle will have to be covered by you.

 

– You are restricted on your kilometer allowance if you a lot of driving, you will face still penalties when returning the lease.

 

– Title of the vehicle remains in the manufacturer’s or the lien holder’s name not yours. It is no considered to be your asset; therefore the vehicle can not be sold without a lien release letter from the lien holder.

 

 

Financing a vehicle explained – Financing a vehicle is paying back on a car loan over period of time, the amount borrowed is the “capital cost” on a vehicle. A.P.R or your annual interest rate is calculated based on your capital cost. Once you have signed the bill of sale the title of the vehicle will be in your name. The vehicle will become your asset and you will be solely responsible for resale or repairs on your car.

 

Pros:

 

– When your finance term ends there is no residual or buy out value, the vehicle will be free of lien and in your name.

 

– Negative equity rarely occurs when you are financing your vehicle, at any given time when you are trying to sell your car, you should be able to walk away from your loan.

 

– You pay less interest overall, when you calculated every penny spent on that particular vehicle, your total amount spent including interest will be less compare to you buying out your lease.

 

Cons:

 

– Monthly payments are much higher compare to a lease, usually double your lease payment, this is because the residual value on a lease payment is also been calculated into your monthly payment.

 

– Cash flow becomes an issue when financing since monthly payment is much higher, if you miss or default on your payment you maybe risking your credit score been lowered.

 

Now you have a comprehensive understanding with both options, you can use your best judgment when it comes to your next new car.

 

Author Rick Tao Li, for more useful articles related to this topic please visit me online at http://www.soscarloans.com

Author Rick Tao Li, for more useful articles related to this topic please visit me online at http://www.soscarloans.com

Finance

Is it cheaper to lease or finance a new vehicle?

Lease vs finance is a double edged sword, depending on your perspective and financial situation the answer may differ. Let’s first explore some of the benefits of a lease, typically in a lease contract the manufacture will offer you a competitive interest rate, along with a residual value. A residual value will change from month to month, and from term to term. This magical figure is derived from the manufacture’s prediction of the vehicle’s resale value 36, 48 month down the road. The residual value is based on many factors, such as the current economy, bank’s lending interest rate, and auction reports and so on. A higher residual value will result in a lower payment, and vice versa a lower residual value will bring up your monthly payment considerably. So the question you have to ask yourself is simple, do you want a lower monthly payment or you can afford a higher payment per month just to save on the interest. Let’s use a typical Honda Civic lease for example, if you are currently leasing a Civic for 48 month with a residual value about 45% of the selling price, your monthly payment should be in the $ 300 range. If you finance the identical vehicle for the same 48 month term, your monthly payment may double to about $ 600. Although the payment is higher but if you look at the big picture, after all taxes and payments are made in full, finance will save you from $ 1000-$ 2000 depending on the interest rate.

Long story short, financing payment usually doubles a lease payment; the reason for this is very simple. Since finance deals with the entire cost of the vehicle (or capital cost as the term that is referred to in the industry) you are paying for the entire car (including taxes). Lease on the other hand will only include about 50% of the cost of the vehicle, because of the residual value. You have a choice at the end of your lease to purchase the vehicle or return it to the manufacture. A leased vehicle does have certain stipulations and limits such as allowed km can not exceed certain amount, or you have to keep the vehicle in reasonable shape when you are returning the lease. Another benefit of lease is you can write it off as a business expense if you are using the vehicle for business purposes. But at the end of the day leasing will cost you more, not much more, but about 5% of the selling price. For some one who needs a new car every 3 to 4 years, and don’t have to worry about any repair bills lease maybe the best option. Also if you need a lower payment because you have a cash flow problem, lease is an attractive option.

With a leased vehicle the title will remain in the manufacture’s name, since the vehicle has been paid off or a lien is registered with the vehicle, you can not sell or modify or damage the vehicle as if it is yours. To purchase insurance coverage you must have full coverage as well, since the vehicle is some one else’s investment a full coverage is required. Financing on the other hand will also require full coverage until the vehicle is paid off, but it is easier to break the contract versus lease. Since the lease payment is equal to the vehicle’s depreciation value, you never accumulate any real equity in the car. Don’t kid yourself of thinking you may return the vehicle with lower kms and expect a refund from the dealership. In conclusion if you are looking to finance a vehicle you will have to face higher monthly payment, but some equity in your name. And to lease a vehicle you are simply paying for the depreciation of the vehicle over time, and you will not get any real equity when you are returning the car.

Thank you for reading this article, it is brought to you by SOS Car Loans, Toronto’s leading bad credit, no credit car loan specialist. To find us online please go to http://www.soscarloans.com for details.

Thank you for reading this article, it is brought to you by SOS Car Loans, Toronto’s leading bad credit, no credit car loan specialist. To find us online please go to http://www.soscarloans.com for details.

Finance

A Fruitful Business Car Finance Option – Novated Lease

 

Novated lease explained

Usually, a car acquisition involves an enormous amount, and that is the reason why car loans are a well-liked alternative nowadays, plus one choice obtainable is the Novated Lease.

It is a three-way contract among an employer, the member of staff and the finance firm. Novated Lease makes car acquirement really easy.

Typical in Australia, in particular, it is an auto acquirement plan where an employee through the employer is able to buy a car. The employer takes care of monthly payments that are taken from employee’s wages, prior to tax deductions. This agreement is also recognized as salary deduction/packaging. When employment comes to an end, the car is left with employee and he presumes the financial accountability. The contract might also be reassigned to a new employer.

This sort of car lease has turn out to be increasingly admired in Australia in current years, since it is favorable for both employee as well as the employer. It presents enhanced flexibility, by means of the selection of the vehicle. Novated Lease basically offers a boost also, in employee’s earnings with negligible expenditure to the company. Financing of the car is compensated with pre-tax wages, implying considerable income tax savings, in favor of the employee. Employers do not need to assume the hazards and safeguarding operating expenses, time and expenditure linked with running and disposal of automobiles when operating a fleet of business vehicles.

Wisely, while going for a this lease agreement one should do their exploration on what vehicle they ardently desire, then exercise all the details on the Novated Lease Calculator and search out the details of the new vs. used vehicles and then form a decision. The calculator is friendly to make use of and processes exact and comprehensive information of the pros/cons for getting hold of a vehicle through salary packaging plan. There are approximately no cons related to this deal for the employer or employee. The employer gets to put in value to his employees recruitment. The employee is able to drive his dream car weather it, be an inexpensive vehicle or else a 4X4 and above all acquire tax benefits, too. What more could one wish for, from a three party business deal that is coming from your company to assist you.

 

Adam Reedy writes about “Novated Lease” – For more information on Novated lease, Car Finance and Car Loans log on to – Fincar.com.au