Here are the two leasing options you can choose from for a perfect company car fleet

 

A company car fleet is something none of us can push further, mainly due to the pandemic making the issue of commute complicated. Various solutions are in front of us, but which is the best? Car leasing is a rapidly growing automotive industry method that offers various benefits to its users. But selecting an apt corporate car lease is a crucial course of action for your business journey. The process of selecting the perfect route and plan for your need can be confusing. Because there are multiple factors to analyse and remember while deciding. Usually, you are offered 2 kinds of leases in car leasing that you can choose from – Finance lease and Operating lease. Let's look at the differences and specifics of each option, so you can decide what is right for your specific need.

 

Finance lease.

The provider of a Finance lease is often a financial institution that does not add any support or automotive services for cars. This lease offers cumulative financing on the on-road tax and ex-showroom price, and you can buy the vehicle with a balloon payment towards the end of the lease.

 

●       Compared to a car, loan the interest added to this lease will be higher and this is mainly due to the cumulative financing. A heavy down payment or high outright payment which are usually present at the beginning of the tenure is absent and instead, a financial lease contains a balloon payment towards the end. About 80% of the car's cost will be equally divided into monthly instalments, so you can pay out regularly over time. And the balloon payment can go up to 20% of the cost of the car.

●       Instead of losing money as expenses immediately, this least provide an opportunity to spread the expense across time. It will be a great help for anyone who does not have the money to make a heavy payment all at once. With a finance lease, there is no need to face a need to spend a huge amount altogether, which is unavoidable if you are planning to purchase a vehicle outright.

●       Another significant thing to remember is ownership and responsibility. In this lease, you have the ownership of the vehicle and not the financial institution that helps with the lease. This also means that the rewards, as well as the risks attached to the vehicle, is your responsibility now.

●       There are some expenses that need your attention like car servicing, roadside assistance and maintenance. Because these services are not usually included in your lease. But many consider this a chance to get maximum flexibility. A finance lease can help you choose from numerous automotive services, the ones you need and you can ensure that they are getting done in your way.

●       Through a finance lease, the leased vehicle becomes one of your assets in your balance sheet. The lease rentals are calculated considering the useful lifespan and value of the vehicle.

 

Operating Lease.

By choosing an operating lease you are getting the right to use a car. It is essentially an agreement through which you pay a monthly payment to the leasing partner. Such a lease provide a few additional advantages that will be included in the payment. You will have the advantage of returning the car or upgrading the car towards the end of the lease period and You can also choose to buy it.

 

●       An operating lease eliminates the need for you to worry about outright down payment. You can further save money because the resale value of the car is already subtracted while calculating the monthly rentals. So, the entire value is not calculated in the lease rental you have to pay, it is calculated with depreciation in mind. Consequently, you capitalise only around approximately 40 % of the car value.

●       An operating lease offers you an opportunity to free your capital and stop it from getting blocked. Vehicle ownership is such an expensive hassle that is easily avoidable with an operating lease because you do not capitalise on the entire value. This you can save your capital and utilise it to invest in more important things that are on your priority list.

●       Another major advantage is the option to return the vehicle towards the end of the lease. This saves you from the hassle of resale value which troubles every vehicle owner. By choosing this lease you escape any risks or obligations of fluctuations and uncertainty in the vehicle resale market. The car ceases being your worry because the leasing company takes care of it.

●       An operating lease offers many additional services like road tax, maintenance, tyres, roadside assistance, servicing etc, all included in the predetermined amount. Your capital will be safe with you and you can plan your finances adequately since no surprise costs will be coming your way.

●       All kinds of leases must be presented in your books of accounts, but in an operating lease, the payment is an operating expense. Which means the rentals are tax-deductible. When a finance lease requires you to pay for 80% car's cost, an operating lease requires you to pay only 40% of the cost. This helps you keep your books light and clean.

There are very few successful and customer-centric car leasing companies in India. Among them, ALD Automotive is the leading French originated automotive mobility service provider in India. Established in 2005, ALD Automotive is one of the globally recognized car leasing companies which provide fleet management and full-service car leasing. They provide a wide range of comprehensive mobility solutions that has helped companies to concentrate on core business, while they take care of almost all vehicle fleet needs.

Like we said before, deciding on the best car leasing plan for your employees can be a tough process to navigate through. Especially when multiple aspects need to be taken into consideration. With a leasing partner like ALD Automotive India, you can easily figure your way through an ideal car lease plan for your business and have a hassle-free, cost-effective car leasing journey.

Getting the best car leasing plan for your employees can be confusing, especially when there are multiple aspects to take into consideration. But with the correct partner like ALD Automotive India, you can get the perfect plan drawn for your business and have a smooth car leasing journey.