Operation
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The operation of leasing also called leasing (Hiring with Purchase Option ):
The hiring with purchase option is a contract which makes it possible a person to rent a vehicle at a financial organization for one period going of 2 and 5 years. At the end of the contract, the tenant has two possibility:
- To buy its car for an agreed price for advance.
- To restore the vehicle and to subscribe a new leasing for a new vehicle.
Does leasing how its function? :
Schematically the hiring with purchase option proceeds in 3 phases:
- The consumer, future tenant, starts by choosing the vehicle he wishes.
- Then, organism of credit buys this vehicle and rents it with its customer for one given length of time (ranging in theory between 3 to 5 years).
- Lastly, the tenant, after a certain period d utilisation, can decide to buy the vehicle rented at an often weak price.
Failing this buy the vehicle, it must, at the end of the contract, to return the car in good condition to l organism hirer out which, if necessary, will restore the deposit to him, deduction made of the possible expenses of repairing. |
The deposit:
Organism of credit can require with the signature of the contract, the tenant pours a deposit to him. This deposit cannot exceed 15% of the total value of the vehicle. In the majority of the cases, it is equal to the amount of purchase option and will thus be preserved by organism hirer out if the tenant buys the car…
Rents:
The rents are monthly or quarterly versed, in general over a period from 2 to 5 years. They can be constant, progressive or decreasing, but their amount is often according to the loss in value of the good. This amount will be weaker than the tenant will have been obliged to pour a deposit and/or a first important rent being able to represent to 35% of the total price of the vehicle. Any contracts consider on the contrary, a differed payment which makes it possible not to pour a rent before a certain time (often between 3 er 12 months).
Made attention, bus with these rents can add of the expenses to the kilometer if you exceed the limit of annual mileage envisaged by your contract.
Purchase option :
It is sometimes possible d´acheter the vehicle before the end of the contract, as of the 12th month. But the majority of the organizations hirers out not purchase option with the tenant at the end of the contract. Its amount is given with advance by the contract. So that the tenant haven't anything to spend in end of the contract to preserve the vehicle, the price d´achat corresponds in general to the amount of the deposit. |
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