Leasign Company

[sampathpj]

Hi Experts,

Please advice if anyone experienced or know about the service of Nation Lanka PLC regarding leasing.

Thanks

Sampath

[chan5]

if you're satisfied with the premium you pay.as long as you pay it regularly , there's NO issue with any leasing company.

Before go for leasing.

Please note .

example for 2million car.

You've to pay

40,000 stamp duty, leasing charges and vat involvement in your premium.

So try out a bank loan if possible.

Don't ask about interest rates from company, it doesn't make any sense with some hidden charges.

So ask about the premium you've to pay for month for each 100000 rupee you get.and compare each company,

go for the lowest.

Example ,

for 5year plan pe*ples leasing 2500 rupee.

Best of luck

[sampathpj]

Thanks chan5 for the explanation.

Btw, what is the difference between hire purchase vs leasing?

[The Don]

Thanks chan5 for the explanation.

Btw, what is the difference between hire purchase vs leasing?

Hire purchase will result in lower monthly payments but you will have to pay an agreed lump sum at the end of the hire purchase period should you want to keep the car. Else you will have to return the vehicle to the company.

Leasing is designed to pay off the entire value of the lease at the end of the agreed period.

[harshansenadhir]

Hire purchase will result in lower monthly payments but you will have to pay an agreed lump sum at the end of the hire purchase period should you want to keep the car. Else you will have to return the vehicle to the company.

Leasing is designed to pay off the entire value of the lease at the end of the agreed period.

small correction Don as companies got things a bit complicated in local context.

Techincally, hire purchase means company gets in to a hiring agreement with the lessee, means, vehicle will be owned (fully owned) by the company and lessee will use it and pay a fee monthly as monthly hire. In terms of legality, risk in HP towards the lessee is very high in case of a default and towards company it's highly favouring as single and absolute owner of the vehicle will be the company and lessee (customer) will only have the right to use it.

In Leasing, lessee owns the asset (be it a machine or a vehicle) and finance the capital by transferring the absolute ownership to the financing institution. In a lease, both lessee and finance institute holds the ownership. However, absolute ownership is being retained with company. Whilst being little expensive, finance leasing has it's own benefits towards a lessee/customer in following terms.

1. if the lessee / customer is a VAT paying entity, then the VAT portion (not the supplier vat but the vat in lease rental) can be reclaimed.

2. rates will not be changed unlike in a loan / HP agreement.

3. in case of a default, lessee will hold comparetively better legal battle grounds as oppose to HP/Mortgage loan

In local context HP is being used for registered vehicles due to high risk involved in a used vehicle as oppose to new / unregistered vehicle. Therefore, companies offer leasing for unreg/brand new/non depreciated assets and offers HP on used/depreciated assets/vehicles. Also the paying of the balance and own the vehicle is not being used, instead HP too gets a similar re-payment schedule similar to Leasing.

Differences are how the legal terms are defined in the agreement, the formats and legality in reminder letters and re-possession process, leasing is [rental(capital+interest)+vat ] where as HP is [rental(capital+interest)] no VAT on rental.

The HP in other countries (use and pay) is termed in here as operating leases, where the vehicle/asset will be a fully owned asset by the financing company (goes into the asset registry as oppose to HP/ Lease) and entire maintenance (corrective/preventive) of the vehicle/asset will be borne and done by the finance company.

Edited September 4, 2012 by harshansenadhir

[whmsujith]

Thanks harshan for detailed comment. A hard copy goes to my car file.

[TheClutch]

small correction Don as companies got things a bit complicated in local context.

Techincally, hire purchase means company gets in to a hiring agreement with the lessee, means, vehicle will be owned (fully owned) by the company and lessee will use it and pay a fee monthly as monthly hire. In terms of legality, risk in HP towards the lessee is very high in case of a default and towards company it's highly favouring as single and absolute owner of the vehicle will be the company and lessee (customer) will only have the right to use it.

In Leasing, lessee owns the asset (be it a machine or a vehicle) and finance the capital by transferring the absolute ownership to the financing institution. In a lease, both lessee and finance institute holds the ownership. However, absolute ownership is being retained with company. Whilst being little expensive, finance leasing has it's own benefits towards a lessee/customer in following terms.

1. if the lessee / customer is a VAT paying entity, then the VAT portion (not the supplier vat but the vat in lease rental) can be reclaimed.

2. rates will not be changed unlike in a loan / HP agreement.

3. in case of a default, lessee will hold comparetively better legal battle grounds as oppose to HP/Mortgage loan

In local context HP is being used for registered vehicles due to high risk involved in a used vehicle as oppose to new / unregistered vehicle. Therefore, companies offer leasing for unreg/brand new/non depreciated assets and offers HP on used/depreciated assets/vehicles. Also the paying of the balance and own the vehicle is not being used, instead HP too gets a similar re-payment schedule similar to Leasing.

Differences are how the legal terms are defined in the agreement, the formats and legality in reminder letters and re-possession process, leasing is [rental(capital+interest)+vat ] where as HP is [rental(capital+interest)] no VAT on rental.

The HP in other countries (use and pay) is termed in here as operating leases, where the vehicle/asset will be a fully owned asset by the financing company (goes into the asset registry as oppose to HP/ Lease) and entire maintenance (corrective/preventive) of the vehicle/asset will be borne and done by the finance company.

exactly..