Lease or loan? What is more profitable? - News about real estate, Kiev, Kyiv region. Real Estate In Ukraine

Lease or loan? What is more profitable? - News about real estate, Kiev, Kyiv region. Real Estate In UkraineThe market of consumer crediting has narrowed, and in these conditions is gaining popularity...Leasing vs car loanThe market of consumer crediting has narrowed, and in these conditions is gaining popularity, financial leasing - long term car rental with a subsequent right of redemption. Despite the fact that this service has several drawbacks and is unfamiliar and difficult for Ukrainian consumers, it can become a worthy replacement of Bank loans and also help in the restructuring of problem loans.How much is the leasing of the people?Leasing is a rental property with a right of subsequent redemption. With respect to the vehicle, the mechanism of this effect: the leasing company gives the customer the right to drive by her car, and the customer pays for it monthly remuneration of the company and only after all payments gets ownership of the car.There are two types of leasing - operational and financial. Prompt used in the short term rental (1-3 months) and is aimed mainly at foreign tourists, and local entrepreneurs. A tourist takes a car, some time goes on it and then returns to the leasing company.A Finance lease provides that the customer over a long contract period (usually several years) pays the leasing company for the cost of the car in parts, then brings the residual value of the property and takes title to the car. Financial leasing can be an alternative to buying a car on credit.The procedure of leasing looks like so. First, the leasing company purchases for its own or borrowed funds car Park, and then offers them long-term lease to the client. The customer chooses the right model and he took with him a passport, a certified copy of the employment record, income certificate and ID code, applies to the company-lessor. Most leasing companies ensure that the official salary of the tenant enough to pay the monthly payments, but the client still had the money "to life".If the lessor agrees, the client signs a contract of lease and pay the first installment. Before the initial payment was 15-20% of the car value, now the stakes have risen, and the client will have to pay about 30% from the total price of the car.The leasing company itself registers the car in swif, she pays for insurance and pension levy. It takes a few days. The lessor assumes all these formalities, and paying the transport fee and annual inspection.However, there is one "but": all of these payments are included in the amount of initial down payment and monthly payments under the lease agreement. Also, the client is obliged to immediately pay 1% of the value of the car for notary services that the contract has gained legal force.Pros...Previously the service of car leasing used mainly legal, not individuals, and they accounted for only 5%. But once the consumer lending sector has considerably narrowed, leasing can be a "lifesaver" and for banks and dealers.Ukrainian Union of lessors predicts that by the end of this year, the number of individuals who have taken a car on lease, will increase significantly. In fact, leasing can substitute for consumer loans.Banks in the conditions of lack of resources stopped issuing loans to buy cars at the end of last year. In addition, increased the number of problem loans that banks are forced to form large reserves. Leasing will allow banks to get rid of illiquid assets or acquire new problems.Many banks have their own leasing companies. And these companies will buy the car the borrower to repay the loan. In this case, the lease will be voluntary compromise in the relations of the Bank with problem client that allows to increase maturity and reduce monthly.In addition, the Bank solves the problem of withdrawal of collateral, because when leasing a car until the last moment belongs to the lessor, and not the client, as in the case of a car loan.The dealers, in turn, need to ensure that the machine was affordable to the buyer. So sellers use the auto leasing to promote sales in a credit deficit.Time is money. The main advantage of leasing - saving time of the client. The leasing company takes care of all the paper and other formalities: registration of the insurance, the payment of all required taxes and fees, registration in the traffic police, routine checkups. The client shall execute only one contract pays only one down payment and gets a car to use. It also eliminates the question of residence, because many leasing companies do not require registration at the place of purchase of the car.There is also customer - clock telephone support line. With its help, you can call the cops or a tow truck, to book tickets or a hotel room, call roadside assistance ("assistance").By using a leasing company can be relatively easy to change from one car model to another, not paying full price. The leased asset remains the property of the lessor, therefore, is not included in the tax returns of the client and litigation about property division.In General, signing the lease contract, the client receives a comprehensive service from a single source without much hassle and red tape....and consFor all the benefits of leasing, the downside to it too much. The first and main disadvantage is that the machine doesn't belong to you as long as you do not extinguish the residual value. If the loan is the scheme "in the morning, chairs in the evening money, the lease provides for reverse order: "in the morning money - in the evening chairs". The customer uses the machine or by power of attorney, or have a temporary registration certificate, which is issued in the name of the lessee.Ownership imposes additional restrictions, because others cannot be disposed as freely as his own.The client is obliged to pass inspection and repair only on specified HUNDRED; has no right to install any additional equipment on the car, like gas cylinders, body kits, neon or cast wheels; may not exceed the limit of annual mileage. The lessor also imposes serious penalties, if the car got in an accident on your fault.All of these points can be interpreted as a breach of contract that would lead to his termination. The initial fee and the lease payments will be lost, and the car will remain the property of the leasing company. The same will happen in case of delay in monthly payments. For early termination of the lease agreement will have to pay huge fines.Which is cheaper - credit or leasing?On the one hand, the leasing rate is less than the credit, but the leasing company tie monthly payments to the dollar.Overpayment on lease in percentage terms, often is greater than for a car loan. But this happens due to the fact that all the required taxes and fees are already included in the monthly payment amount.In many respects the advantage or disadvantage depends on the length of lease and residual value of the car.

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