October 24, 2019

What is car leasing? Car loan Lease agreement

The leasing contract is one of the civil law contracts. By leasing we mean giving up the right to use things. By entering into a leasing contract, we do not sell property rights, but only the right to use them. The leasing agreement is concluded for a specified period. In return, the person to whom the right to use things has been transferred undertakes to pay the leasing fee. Leasing fees can be compared to repayment of loan installments. Every month we have to pay the leasing installment. For a leasing contract to be valid and have legal force, it must be concluded in writing.

 

Leasing entities

Leasing entities

A leasing contract can be concluded between two or three entities. First of all, we need a lessee and lessor to talk about leasing. A lessee, i.e. an entity that uses a given item that is the subject of a leasing contract. The lessor, i.e. the owner of the thing, which does not sell it, but only gives it over to another person for use. Only after the end of the lease agreement, in a separate agreement, may it sell the previously leased product. We can also distinguish the third entity, i.e. the seller. His presence, so that you can talk about leasing, is not a necessity. It is an entity that is the producer of things.

 

What is car leasing

What is car leasing

Car leasing is characterized by the fact that the subject of the leasing contract, as the name implies, is a car. The lessee concluding the lease agreement receives the right to use the car owned by the lessor. For this reason, that the lease is not a viable form of a natural person, as in the case of leasing a car, in the person of the lessee meet the most entrepreneur. It is all because of the amount of taxes and fees. This form of credit is much more beneficial for an entrepreneur than for a private individual.

 

Car leasing and car loan

Car leasing and car loan

We can tailor car leasing installments to our current financial capabilities, which we cannot afford in a loan agreement whose purpose is to buy a car. It works in such a way that the higher the amount of the final payment for the item, the lower the monthly installments. If our financial situation is not the best now, we can choose the minimum installments, and then the final purchase price of the car will be higher. And vice versa. If we do not complain about the lack of funds, we pay higher installments, the final purchase price of the car can cost us practically nothing, because in fact, we have already paid for it in installments. The amount of the initial payment for a lease agreement only affects the amount of the monthly fees, without affecting the cost of financing the lease. However, it is different when you decide to take a loan. The interest rate on the loan also depends on the amount of own contribution. The less funds we have, the higher the installments will be.

written by David Brown - Posted in Uncategorized

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