Archive for September, 2008
Finding the best car lease is like open pit mining; half of your life (peace of mind) is at risk. Most car buyers ask the same question: Which is better: car buying or leasing? or Help! I can’t find a good car to lease! (Most of the time it’s in broken English. Check YahooAnswers.)
So to set things straight for all lessees and buyers at that, let me list down the sources you need to look into for that most sought-after yet elusive great car lease.
Prime but not primitive sources of leasing info are radio, newspaper, TV ads, and of course—the Net. Car manufacturers are fond of giving special leases for limited offer, not to mention subsidized or subvented leases. These companies usually offer these through discounting the price, boosting residual value, or by lowering interest rates. The thing is, you should work harder on your credit score; they only take in those that have 700+.
Next in line for the best car lease source are pricing or auto referral services in the Net. All you need to do is tell them the car you want and they can give a list of the best purchases or leases from the dealers who have agreed to your set price; the best part is, they will call you, not the head-splitting other way around. Another source, CarsDirect, when you like their offer lets you go to their dealership, sign the papers, and drive away, no sweat!
Top 3 among the sources is the nondealer lease sources. This simply means independent car lease companies. They may not be at par with car dealers’ promotional deals, but they can be good at hard-to-find, high-priced luxury cars. If this is not a guarantee that you will end up with your most-coveted car lease, then you might as well sue us for legwork.
When a car is out of your company’s budget but is a necessity, you need a finance lease, a VAT-free car financing method. In this car financing method, the moveable asset or simply the car is bought from a supplier; your company then pays an effective rental instead of a repayment.
Monthly rental for the car consists initial car cost, finance lease period, and residual value. One should only bear in mind though to stick to the mileage limit since this will be strictly taken against your residual value.
The lessee has full use of the leased car; however, he can’t own the car at the end of the lease. But the good thing is when the car is sold, a percentage of the sale is given to the lessee. But if you insist, then you can pay the car’s entire cost plus interest in monthly installments.
Now let’s head down to the benefits that this finance option offers: low initial payment, flexibility in payment options, updated car models, VAT reclamation of up to 50%, tax allowances application for hire rental, worry-free maintenance, sales proceeds.
So next time you go shopping for the right car financing, you can add finance lease in your major options and drive on!
How can car leasing options vary widely?
If you’re going to browse further on the previous posts in this site, you will find out that we have tackled quite a variety of car leasing types. Now let me add one more to the prolonging list. Here’s what we call short term car leasing.
So what do we mean by short term car leasing? When the usual car lease extends up to three years, short term car leasing is only from three months up to 12 although some companies offer 28 days as the shortest duration.
This car lease type demands the same form of payment as the regular car lease option, which is based on the difference between the value of the car at the start (retail value) and end of the term (residual value). Mileage limit is more stringent in a short term car lease. Any excess of it will be taken against you as residual value addition. You also have to return the car to the leasing company after lease end. You simply don’t have the option to buy out the leased car. So if you think that this option suits you right. Go ahead and start scouting for the right car now!
You must be one of us whom after finding the right car model at maximum affordability just experience freezing fingers when about to press the Send button on the eBay site.
So what it is in eBay that scares off car buyers?
The element of non-visibility is only at an advantage for online chatters; but as for those who are serious customers online, this is not a resolved issue yet. Closing a deal online appears to be crossing your fingers that the non-existing person on the other side is true to his words. This has been touted as “honor system.” Without it, buying at eBay is not possible; the concept extends even to other items and services sold online.
It has been an online battle between sellers and buyers out there at eBay; without knowing the ins and outs of the maze, you might end with a bad deal and go home with half the car you want; our main armor against this is found on these nuggets of knowledge we compiled for you. Read on and be mindful.
Narrow the search by being definite in the car model you chose. You can save time in checking the eBay site by writing the exact model of the car on the search field.
Check feedback on the seller from other buyers; this is to check the credibility of the seller and to make sure he has experience in making online deals. Check also the auction’s description and ask for photos by email if necessary.
Be patient in observing the auctions before you jump into the bidding. Click on the “watch this item” for tracking sales and also “completed prices” for the final sale prices.
Develop good rapport with the seller; it enables you more flexible sales deals. The right seller to deal with is one who doesn’t set a minimum winning bid amount which is as much as a car’s retail value and one who allows you to cancel the deal after inspecting the car.
Even if banking is more on financing online purchases, interstate transactions are cash based.
Hire a mechanic and schedule for an inspection when you arrive in the scene. You can find inspection services in major metro markets with no-limit car warranty for the drive home.
Use Carfax for checking the vehicle history report and online pricing services for the most realistic retail and wholesale values of used cars.
Set a fixed price for a car and stick with it. Don’t engage in a bidding war. Include the travel and delivery costs when you have the car shipped after winning the auction.
When you are about to check your car on another state, buy a round-trip ticket. You can cut on the time spent when you decide to cancel the deal.
You must have heard of some acronyms posing as car financing options. However, it has remained a riddle, creating cobwebs of doubt, as to what comprise these car financing deals.
One of these acronyms is CHP short for Commercial Hire Purchase. It’s that option where customer hires the car from a financier, paying a fixed monthly repayment, over a certain period of time. In this set-up the customer gets to use the car but is not the righteous owner of the car, not until the end of the contract when the car’s total amount with residual values and interest charges have been paid full; then the customer can claim ownership of the car.
So let’s discuss the advantages you can get from a CHP, sometimes called HP. There are several of them:
- fixed interest rates
- flexible contract terms usually from 24 to 60 months or two to five years
- residual value (full or installment basis) that may be placed on contract
- fixed monthly repayments
- cash or trade-in may be used as deposit
- costs are known in advance
- tax deductions for cars used for business
- government sales taz is not added on the monthly rate or the residual amount
- customers can claim GST on the vehicle price
- finance allows low interest rates since finance is secured against the vehicle
Who can benefit the most of a Commercial Hire Purchase deal are partnerships, companies, sole traders whose GST is on accrual basis,and any individual, private or not, using the car for business.
Leasing companies have defined its identity in the auto-manufacturing world. However, contrary to its popularity, not only as the last alternative to any finance arrangement but as a lucrative financing business, there is still a lot of chaos as to what are the types of leasing companies.
To establish order in this aspect, we hereby state the three categories of leasing companies:
Banking leasing companies are leasing companies that are affiliated to authorized finance groups like ING Lease, Raiffeisen Leasing, and UniCredit Leasing. They comprise about 50 per cent of the leasing market value.
Captive leasing companies are those leasing companies that belong to Radacini Leasing and RCI Leasing which comprise about 33% of the leasing market.
Independent leasing companies like Motoractive Leasing are leasing outfits that are on their own. They make up about 17% of the leasing market.
Of these categories, three types of leasing were brought to life. Here are the three in no particular order:
Operational Leasing: In this process, the customer purely rents the product without any intention of buying it at the end of the lease; it’s the company’s responsibility to rent the product out to someone else. This started in Romania and may be more appropriate and popular for leasing equipment and fleets.
Financial Leasing: The customer, in this process, rents an item and has the intention and privilege to buy it when the lease ends. Financial leasing dominates the car leasing process.
Real Estate Leasing: This concerns more about renting residential units and buying them in lease end. According to Bernd Kunzel of Raiffeisen Leasing, this process spells out several advantages as compared to mortgage loans. For one reason, it has an upper hand for undertaking the responsibility of paying the site inspector.