In a situation where leasing is used to purchase a car, it is possible to choose between two types of leasing – financial and operational leasing. Who and in what situations will be the most suitable, explains “Luminor Leasing” manager Raivo Bāle.
–
–
Content will continue after the ad
Advertising
–
“The process of receiving a lease is very simple and does not take much time, but before receiving a loan, you must evaluate your financial capabilities and obligations, as well as choose the most suitable type of leasing according to your wishes and needs,” says Bāle.
Financial or operational leasing?
There are two types of leasing for the purchase of a car: financial and operational leasing. The main difference is whether you want to become the full owner of the purchased vehicle. When choosing financial leasing, payments for the car are made in installments, gradually covering the value of the vehicle. After that, the car becomes the customer’s property.
Operational leasing is more suitable for customers who do not want to become the owner of a car, so it is very often used by companies. Both types of leasing are available for both used and new cars, however operational leasing is more often used to get a new vehicle into use.
Operational leasing has lower monthly payments because the entire value of the car does not have to be covered during the contract. At the end of the obligations, the car goes back to the buyers – car dealers, from which the car was originally purchased. At the same time, operational leasing is more flexible than financial leasing. For example, if you still decide to buy a car after the end of the contract, you must inform the lessor of your desire, who will examine the options and inform you if and how it would be possible.
Evaluation of financial opportunities
The first step is an assessment of needs and financial possibilities. It is important to remember that additional leasing payments, vehicles will also have other related costs, for example, the car will have to be insured and an annual operating tax payment must be made. Their amount depends on the car’s year of manufacture, make and model, engine capacity. You must also take into account the recent increase in the Euribor rate, which can increase the monthly payments.
Car maintenance, which directly depends on the car model, should not be forgotten.
No need to go to the bank
The leasing process is not complicated – if the dealer has concluded a cooperation agreement with the leasing company, then the client can also conclude a leasing agreement for the purchase of a new car at a car showroom. It should be taken into account that for the purchase of a used car, a vehicle appraisal will be required for leasing, which can be provided by appraisers accepted by the leasing company. For the purchase of both new and used cars, you will also need to fill out a leasing application and present a valid identity document – passport or ID card. If the car is purchased by a legal entity, it will be necessary to attach the previous year’s financial statement for both used and new cars for leasing.
According to Bāle, the leasing review process is very fast – often the answer is received on the same day. If a more expensive car is chosen or the customer has other credit obligations, the review period may be a little longer.
–
