Until recently, buying a car on lease was an inaccessible service for ordinary users. Several years ago, it was issued only by commercial entities for the purpose of promoting business. Today the situation has changed dramatically, and leasing cars are also available for ordinary car enthusiasts.
There are two types of car leasing:
- Operational (car rental without purchase option).
- Financial (car rental with option to buy).
According to expert data, leasing using the first method is no more than 10%, and in this case we are talking about a new fleet of vehicles. Thus, leasing with the right to buy accounts for more than 90% of the total number of all car leasing transactions. For Western Europe the numbers are slightly different. Here, the percentage of operating leasing exceeds 30 points, and in some countries even operating leasing is 70% or higher. But what does car leasing mean?
What is a car lease
Each person has several opportunities to use their own vehicle:
- car rent;
- buying a car on credit;
- buying a car with personal funds.
A leased car is a middle ground between the first two options. This method of using transport is beneficial for those who do not want or do not have the opportunity to purchase a car with personal money.
Thus, the concept of “car leasing” means a long-term lease of a vehicle with the possibility of its further purchase, and in some cases without it at all.
Stages of buying a car on lease
- A car enthusiast who has decided to lease a car and has already chosen it must contact a leasing organization. There, to conclude this service, you will need to provide the necessary documents. Many car dealerships maintain contact with leasing companies, and therefore car leasing can be concluded right on the spot.
- Next, the lessor reviews all the documents and makes his decision on the possibility of obtaining the service. If the transaction is approved, then a car leasing agreement is concluded between the parties, which stipulates all the conditions for the provision of the service, the amount of payments and the procedure for their payment, and the period for the transfer of the car into the ownership of the user. A purchase and sale agreement is immediately concluded between the leasing organization and the seller of the vehicle.
- Then the lessor must buy the car and register it in his name. For this, personal funds are used, and in some cases, the buyer’s money, which is paid as a down payment. Next, the car is leased to the lessee under the contract.
- After which the buyer can use the transport, but he is not the owner and, accordingly, cannot dispose of it. The buyer is obliged to make payments in accordance with the concluded agreement, and the leasing organization has the right to systematically check the technical condition of the car. Such inspections are usually carried out at least once a year.
- If at the end of the contract the entire amount of payments has been paid, then the car becomes the property of the buyer. Now he is the owner of the vehicle and has complete control over it.
Advantages of purchasing a car on lease
Leasing a car is much easier than buying it on credit. The point is the requirements presented to the buyer by the lessors. They are lower than those offered by banks.
The use of a personal vehicle that can be purchased on lease is often of interest to such categories of citizens who would not like to announce the presence of their own property. These include, for example, government officials or married people who are worried about the division of property in the event of a divorce.
A loan for commercial (freight or passenger) transport is practically unavailable to an individual. Whereas with the help of car leasing you can even buy special equipment.
A car leasing agreement is much easier to terminate than a car loan. Thanks to this, you can simply change cars at will, without the hassle of selling them.
Car dealerships often provide good discounts to their regular customers – leasing companies.
The leasing company can specify in the contract and, accordingly, initially undertake additional services. These include: car servicing, provision of another car when your own car breaks down. In this case, all expenses will be evenly divided among all payments under the leasing agreement.
Disadvantages of leasing a car
For several years, the vehicle does not belong to the buyer until the amount of payments is repaid. That is, if the buyer violates the terms of the contract, the lessor has the right to return the vehicle.
Often, car leasing is more expensive than a loan. Given equal price conditions, leasing is an unprofitable service regarding the financial side of the issue. This does not apply to situations where car dealerships provide discounts to lessors.
The car leasing agreement may stipulate a certain technical maintenance service, which sometimes may not be entirely convenient for the buyer. This concerns the financial and territorial part of the issue.
Although leasing, unlike a loan, does not imply the transfer of ownership of the car initially, it does require the investment of personal funds (as a down payment).
Registration of ownership of a vehicle in a leasing scheme is carried out twice: first from the seller to the lessor, and then directly to the buyer. This means an additional expense that is covered by the buyer.
The process of purchasing a car on lease by an individual
To lease the car you like, you must, first, choose a leasing company with a good reputation. You should not use the services of the first leasing organization you come across or, even worse, the one imposed by a company at a car dealership.
Compare the conditions offered by different lessors. After all, purchasing a car on lease means long-term financial cooperation for several years. And even if the difference in the amount of the monthly payment is practically invisible, the final amount of overpayments may differ significantly.
Having chosen a company that meets your requirements, consult them on all issues that concern you. When the final decision is made in their favor, you should collect the documents necessary for car leasing and make an application.
The list of required documents for obtaining a car leasing is usually similar to the package of documents for concluding a car loan:
- passport;
- work book (or copy);
- income certificate;
- other documents that confirm your solvency. This could be property certificates, account statements, etc.
Of course, the list of documents in a specific situation may differ and depend on the leasing organization. The list of required documents should be checked directly with your lessor.
Many people are interested in whether it is possible for an individual to take out a car on a financial lease without a down payment? Yes it is possible. However, it is important to know that an advance payment can greatly facilitate subsequent payments. Because the higher the advance amount, the lower the amount of payments under the agreement with a private person.
The leasing company charges interest on the purchase price of the car. This value is calculated as the cost of the subject of the transaction minus the down payment. Therefore, if you deposit a large initial amount, the financing amount will be reduced. This means less interest and an increase in the cost of the contract.
However, not everyone has the opportunity to pay a down payment. Therefore, many financial institutions are increasingly offering individuals to lease a car without this condition. It is incorrect to assume that only freight transport and special equipment are purchased through leasing. Nowadays, passenger vehicles are being leased. This is called car leasing for individuals.
Leasing a car for individuals without a down payment
You have decided to lease a car for individuals without a down payment in Moscow to work as a taxi driver. What happens next? You choose a car at the automaker's dealer showroom. Your lessor buys this car, registers it with the traffic police, insures it and transfers it to you for several years.
Every month, an individual transfers the difference between the purchase price of the car and its residual value, which is stated in the contract. When the contract expires, the vehicle is transferred to the leasing company or purchased at a fixed redemption price.
Car leasing for individuals has its advantages:
- no down payment;
- regular payments are lower than with car loans;
- the lease payment often includes all costs for insurance, scheduled maintenance, tire fitting, seasonal tire storage, etc.);
- the application is processed quickly (compared to a bank loan for an individual);
- A minimum of documents are required for registration.
Conditions for obtaining a car lease and necessary documents
There are certain conditions for obtaining a car lease for individuals. This:
- reliable financial condition of the lessee;
- high level of liquidity of cars;
- untarnished name in credit institutions;
- good credit history of an individual;
- the possibility of obtaining a property pledge or the presence of guarantors.
To submit an application in Moscow, St. Petersburg, or any other city, you need to fill out and take the necessary documents to purchase a car on lease without a down payment.
- application form of an individual according to the form of the lessor's company;
- a copy of the Russian passport (all pages);
- a copy of the second document (driver’s license, international passport);
- document on income for the last six months (certificate 2-NDFL, certificate from place of work);
- a certified copy of the work record book (employment contract, other documents confirming income);
- other documents in accordance with the lessor's request.
When going to the leasing company's office, do not forget to take with you all the listed documents.
Where can I rent a used car for individuals?
In addition to a brand new car, you can rent used vehicles. Companies' offers to purchase used cars without a down payment are updated regularly. Because many lessors work with such cars. They often offer the sale of a car without a down payment from the so-called lease confiscation. These are cars that are confiscated from clients due to failure to fulfill obligations under transactions. You can rent them on the most favorable terms.
Renting used cars is profitable. That's why:
- There are only proven cars in the park;
- guarantee of legal purity of the transaction;
- full car diagnostics;
- certified technical condition;
- one owner.
Truck leasing
Today, not only legal entities and entrepreneurs purchase trucks under financial lease conditions without an advance payment. It is possible to lease trucks for individuals without a down payment. To do this, many companies request only two documents:
- driver's license (passport, international passport);
- certificate of state pension insurance.
In general, less stringent requirements are imposed on the rental of trucks and special equipment. This is due to a number of reasons. Compared to a passenger car, the difference is obvious. One way or another, cargo is used to conduct business. Therefore, it will generate income. The lessor can adjust the payment schedule in accordance with seasonal changes that have a direct impact on the business. It is possible to take a deferment on debt repayment.
How to buy a used car on lease - the cost of a car loan for a used car?
Many people prefer not to take out a car loan, but to lease a used car. This is a simplified transaction approval procedure and lower interest rates. And, besides:
- purchase without down payment;
- fixed monthly payment;
- personal approach to each borrower;
- minimum documents;
- no additional fees;
- minimizing risks.
It will take a long time to get a car loan. Some people find it difficult to meet all the requirements of a lending institution. Therefore, car buyers are increasingly turning to lessors.
At this stage, car leasing for individuals is not widespread in Russia. Consumers prefer to take out a classic car loan. This is due to the fact that there is still no stable trust on the part of clients in a transaction where the owner of the car is the lessor. But it is worth paying attention to these types of contracts. Today we will tell you what car leasing is, how profitable it is, and consider the risks of such a transaction.
Car leasing
Car leasing for individuals is a type of long-term lease with the right to buy the car at the end of the deal. The car is owned by the leasing company for the entire period of the contract. The lessee undertakes to make monthly payments, and when the last payment arrives, he has the right to buy the car, which will become his property.
Vehicle leasing is not as common as car lending. Many potential borrowers are frightened by the fact that the leasing organization is the owner of the purchased equipment. And he can pick up the vehicle if the terms of the leasing agreement are violated, for example due to overdue debt.
But credit institutions also have the right to sell a pledged truck or car to pay off the debt, despite the fact that it is owned by the borrower. In Russia, leasing transactions began to develop in 2010 in the retail market. Currently, leasing agreements account for no more than 3% of other types of car sales. Whereas in Europe, 70% of transport is purchased this way. Therefore, car leasing for individuals should be considered as an alternative to a loan.
What is car leasing? Car leasing for an individual can be provided in two options: with and without vehicle purchase. The lessor sets a payment schedule that must be met. Also, leasing conditions for individuals include other documents similar to the loan agreement:
- transaction amount;
- down payment or security deposit;
- residual payment;
- terms and dates of payment.
You can lease a car without the right to buy. In this case, upon completion of the contract, the borrower has every right to lease a new car, thus saving time on selling the car and registration actions. The standard term of a car leasing agreement for individuals is 3 years, which actually allows you to constantly have a new car.
Advantage for individuals
Buying a car on lease to individuals has its undeniable advantages:
- It is possible to exclude the down payment. A deposit may be used and can be returned upon completion;
- companies offer discounts on cars, trucks, and commercial vehicles of up to 30% through close cooperation with dealers;
- a government support project is provided, thanks to which a minimum discount of 10% is provided;
- the terms of the agreement are somewhat softer than in the case of lending. The monthly payment amount can be three times lower than for a similar loan;
- it is possible to include in the price of a car leasing service from the lessor, who will carry out maintenance, change and store tires, and additional equipment for transport can also be included in the price;
- the decision on the possibility of a transaction is made faster than with a car loan;
- the package of documents has been reduced. A car can be leased for individuals using a passport and driver’s license, but subject to confirmation of solvency certificates.
Rent, buy or lease
| Analysis | Leasing | Rent | Purchase |
| Requirements for the borrower | Over 18 years of age, positive credit history, proof of solvency, other documents | Capacity | |
| Speed of registration | Time required, approximately 3 working days | On the day of purchase | |
| Car provision period | Lease with option to buy at end of term | The contract is drawn up for a short period, up to 1 year. | Permanent contract |
| Responsibility | Repairs are carried out by the client, payments under the contract are not suspended or changed | Repairs are at the client's expense; rental payments are not made during the repairs. | Full responsibility |
|
Own | The owner is a leasing company, at the end of the term you can buy the car |
Not expected | |
| Payment schedule | It is necessary to fulfill the conditions according to the schedule | No | |
|
An initial fee | Various options - there are with and without an initial payment, there is an option with a deposit amount that is returned at the end of the term |
Not applicable |
|
A car leasing agreement for individuals is beneficial to both parties to the transaction. The leasing company retains ownership. As a result, the risks are significantly reduced. Thus, the lessor can set a low interest rate, also due to the loyal conditions, the monthly payment is quite small and the minimum requirements for the borrower.
To change the car, if it remains with the lessor, there is no need to sell; upon completion, you can lease the car again for a certain period, thereby continuing the long-term rental relationship.
Leasing of commercial transport, special equipment, and trucks is provided, which is not feasible in banks. In banking organizations, money can be obtained through a consumer loan, and in order for the amount to be sufficient, most likely, you will have to secure the loan with your own real estate as collateral.
An alternative is to lease a truck. But in this case, the amount of monthly payments will be higher and there is no possibility of obtaining ownership of the vehicle, as opposed to leasing.
Loan agreements require additional services and commissions. To buy a car on credit with lower rates, you often have to take out life and health insurance and other additional insurance. Some banks charge fees for transferring funds or maintaining an account.
When leasing a car, the borrower can save up to 30% of the market value of the vehicle. This is due to the shady cooperation between leasing organizations and dealerships. A pawned car purchased on credit must be insured against the risks of theft and damage. The comprehensive insurance amount is included in the loan body or paid at the expense of the borrower; in most banking organizations this is a mandatory condition. Let's take the offer of Sberbank or VTB 24. Leasing can be issued without comprehensive insurance.
The lending institution will not service the vehicle. The borrower assumes all responsibility for the pledged car. While the leasing agreement may imply that the lessor assumes the technical side of car maintenance.
Before leasing, many people ask whether their spouse’s permission is required for such a transaction. Unlike secured loans, there is no need to obtain such permission. Thus, leasing should be compared with a loan. Both the first and second options can be beneficial. It all depends on current offers and market situations.
A private individual, turning to the lessor, has the right to draw up an agreement without a down payment. Such offers are relevant in the leasing market. In this case, the company receives additional risks, so the borrower should take into account that registration under two documents is not provided in this case; it will be necessary to confirm their income. Sufficient information is the 2-NDFL document, a bank account statement and other standard pieces of paper specific to applying for a loan.
The application procedure is similar to regular lending. You must first decide on the car. Then contact the lessor with identification documents to obtain a preliminary decision. Within 3 days, specialists will check your credit history, create a request for a car and contact the borrower to finalize the deal.
At this stage, it is necessary to fulfill the document requirements and provide them to the lessor. After which the company will invite the client to pay the down payment, sign documents and set a day when they can pick up the new car.
Leasing is gradually gaining popularity in Russia, the main advantages are:
- low monthly payment;
- the ability to exclude the independent sale of a car by signing up for a new long-term lease;
- the opportunity to return the deposit amount;
- You don’t have to apply for an expensive comprehensive insurance policy.
Most clients prefer not to change the car, but to buy it back at the end of the contract, becoming the owner. There is also a convenient service provided by the leasing company, which can organize the registration and deregistration of the vehicle and provide maintenance.
- "VEB-leasing". A leading company whose portfolio contains more than 524 million rubles through leasing transactions. Located in Moscow.
- "VTB Leasing" A subsidiary of a well-known bank with 380 million rubles in its portfolio. Also Moscow.
- Sberbank Leasing closes the top three Moscow leaders. About 375 million rubles.
- Among the regional companies, we can highlight Siemens Finance (34 million rubles). Located in Primorsky Krai.
- St. Petersburg "Baltic Leasing" contains 32 million in its portfolio (St. Petersburg).
- Siberian leasing company from Novosibirsk with 12 million rubles.
At the moment, there are more than 100 leasing organizations located throughout Russia. There are both large federal companies that are part of banking structures and small regional firms. When choosing a partner, you should take into account all offers in order to find the most profitable one for yourself. And you can compare the conditions with alternative car loan deals.
Despite the fact that in our country it is not as widespread as car loans, the growth of leasing agreements for the purchase of vehicles is growing. We have already told you about the profitable new leasing programs that have appeared on the Russian market. But, unfortunately, leasing does not always have an advantage over car loans.
In recent years, many car dealers often offer us not through a bank loan, but through a leasing program for individuals. According to the leasing terms, anyone can rent for a minimum down payment and low monthly payments under the contract.
At first glance, leasing has an advantage over. But it's not that simple. In reality, leasing is not a win-win way to buy a car. So before you run to the ATM and withdraw cash for an initial 10-20 percent deposit, read our material, which will tell you that purchasing a car on lease is not the best solution, which is ideal for car enthusiasts.
4. You are not the owner of the car.
Have you ever rented a microwave? Have you ever rented a microwave oven?
Why did we ask these questions? In order to make it clear that leasing is the same as renting. That is, you make an initial payment, begin paying monthly payments, having received the vehicle for use, but legally remain a simple tenant of the property and are not the owner of the car.
Agree that renting a kettle and any household appliances is absurd. If the decision to rent a microwave or kettle seems illogical, then it also makes no sense to rent a car long-term for private needs in your life.
Of course, everything depends on the terms of the leasing agreement, since in our country there are several car leasing programs for individuals. Also, the meaning of leasing depends on the expected period of use of the car. If you want to use it for a long time (more than 5 years), then there is no point in purchasing a vehicle on lease, since all these years you will pay the same monthly payment and significantly.
If you like to own a practically new car and expect to switch to another new car within 3 years, then it makes sense to consider leasing for individuals, but only if the dealer or leasing company has a profitable program.
But remember that the feeling of something new wears off quickly. Despite the complexity and technology of vehicles, pleasant feelings after buying a new one evaporate very quickly, just like when buying a new TV, washing machine, telephone, etc. Therefore, there is a risk that after a very short time you will want to buy another new car. Of course, before purchasing a new car, you will be forced to pay the leasing company. But remember that with a leasing agreement, the car does not belong to you, and you cannot simply use the proceeds to buy a new model.
Naturally, we will resolve this issue, even if you cannot pay for the lease ahead of schedule. To do this, it is enough to find a buyer for the car who will simply deposit money in the name of the leasing company during the transaction. But still, unlike when you are the full owner of a car, under a financial lease (leasing) agreement you are limited in your rights and will not be able to do much.
3. You are a slave to the dealer
By purchasing a car with our own cash (or that we received from a bank for other purposes), we are free from various restrictions that are imposed on us when we purchase a car on lease. Having bought a car for cash, you can, at your request, replace the engine, carry out tuning, install any alarm system, etc. With a lease purchase, you will be locked into the dealer. in a certain place, you will not be able to carry out any modifications or additions to the car without permission from any car service center.
In addition, when you are the owner (purchase for cash or) you can drive as many kilometers as you like per day/month/year. But under a leasing agreement, the dealer or leasing company may limit your use of the vehicle by setting a daily/monthly or annual mileage limit.
This limit depends on the terms of the contract and its duration.
Of course, you can calculate your maximum mileage for the year in advance and agree on it with the lessor. But remember, the higher the mileage, the higher the cost of financial lease will be. What if you might need to go beyond the mileage limit during your contract? Then you will have to re-coordinate everything with the organization that provided the leasing, and recalculate the cost of monthly payments. It is very uncomfortable. With such “bondage” you will feel like you are not a free owner of the car.
In addition, remember that if the leasing conditions provide for the return of the car after some time, then when returning the car, the leasing company can unilaterally reduce (which was calculated in advance in the contract when it was signed), which will count towards the return. What does this mean in practice?
This means that when returning the car, you may be asked to pay extra, for example, for possible scuffs on the center console or cracks in the interior trim. Thus, the company will unilaterally increase the amount of depreciation of the vehicle for the entire term of the contract. What if you were in an accident while owning the car? In this case, even a small scratch can affect the leasing company's valuation of the car, which can also increase the final amount you have to pay.
2. If you can't make your monthly payments, you'll lose everything.
When purchasing a car on lease, you must remember that you are not the owner of the car for the entire duration of the contract. So after paying the down payment, making monthly payments, if you have problems making payments according to the payment schedule, you can lose all the money paid and the car.
For example, if you suddenly lose your job, then of course you will not be able to pay the amount set by the leasing company every month. If you were the owner of a car, then in case of financial problems, you, always being the owner of a used car, will be able to sell it at your discretion under any conditions on the used market.
Even if you purchased a car with the help of p, and are faced with financial problems, you will be able to restructure the loan and receive a grace period for lending, and also, as a last resort, obtain approval from a banking organization to sell the vehicle on the car market.
There will be problems with leasing in this state of affairs. Basically, leasing companies in this case ask you to either give up the car or find another person who agrees to transfer the financial lease into his name. Believe me, in conditions when the leasing market for individuals is practically undeveloped in our country, it will be practically impossible to find those willing to transfer a financial lease agreement. If you think that in this situation you can find some organization (company) that will agree to transfer the lease to itself, then believe me, it will be difficult to do this, since various legal entities prefer to buy vehicles new from dealers.
Also remember that the leasing company may impose a fine on you for early termination of the contract (depending on the form and terms of the contract), which can amount to almost the full amount of the car. You know what's surprising. Many financiers and economists seriously consider leasing a wise investment. Do you see the benefit here? We don't.
1. You're literally throwing away money.
Let's conduct a thought experiment about what happens in the future if you buy a car with your own money, with help, or buy a car on lease and use it for three years.
Buyer "A" - purchases a three-door Ford worth $18,000 with his own cash.
Buyer "B" - A buyer purchases a three-door Ford worth $18,000 with a three-year auto loan (at 12 percent interest) with a down payment of $8,000. The monthly payment will be $377.7.
Buyer "C" - Enters into a lease agreement and takes a three-door Ford worth $18,000 on a finance lease for three years. The down payment will be $8,000. The monthly payment will be, for example, $125. The terms of the agreement are to return the car to the lessor after three years.
Now let's compare what is more profitable when owning a car for 3 years?
Buyer "A" the machine costs $18,000, excluding three years of indirect costs associated with maintenance and other operating costs. After three years, the market average will be $10,000. Buyer "A" can sell the car at any time at market value.
Buyer "B" will pay an initial $8,000 down payment and will pay $377 each month. As a result, the car owner will pay $21,597 over three years. If after three years the owner decides to sell his car, selling it at the average market price of $10,000, the total loss due to the car loan will be $11,597. . In terms of each month, the car owner will lose approximately $322 per month.
Buyer "C" When concluding a leasing agreement, he will contribute his personal funds in the amount of $8,000, and will pay $125 every month for all three years. As a result, the buyer will lose $12,500 over three years of using the car, giving the car to the company at the end of the contract.
Also, if the user of the car decides to keep it after three years of ownership, he will have to buy the car from the leasing company at the average market price of $10,000. As a result, the Ford car will cost buyer “C” $22,500, which is an increase of $907.
Of course, if you compare a car loan and leasing, the final overpayment under the leasing agreement is not particularly large, but, nevertheless, do not forget that when buying on credit you have more freedom to choose where to service the car, there are no restrictions on daily, monthly or annual mileage. Also, having bought a car on credit, you have the right to pay off the full amount of the debt at any time and become the full owner of the car. Including during the validity of the loan agreement, you have the right, with the permission of the banking organization, to sell the car at your discretion on favorable terms.
It is noteworthy that even if you enter into a leasing agreement, which stipulates that after the end of the lease (for example, after 3 years) the car becomes your property, you will still significantly overpay compared to a car loan. Moreover, the overpayment may be even greater. In addition, with this type of leasing, the monthly payment will be several times larger, which ultimately makes the leasing agreement practically a car loan agreement.
Also, do not forget that, as a rule, the leasing agreement has different or increasing coefficients, which can lead to an increase in the cost of financial lease (leasing). For example, for damage to a car through your own fault, for exceeding the established vehicle mileage limit and for many other reasons specified by the lessor in the contract.
Therefore, before signing a leasing agreement, weigh the pros and cons, carefully calculating all your expenses, overpayments and, in general, all the terms of the agreement (including be sure to read the text in fine print). Compare the terms of leasing with a car loan and with a regular cash purchase.
Make a smart car purchase without being tempted by low monthly lease payments. Look at leasing terms with a clear eye and don't be fooled by the various special conditions that the dealer or leasing company offers you.
To make a final decision on the form of purchasing a car, you need to determine for yourself the expected period of ownership of the car.
If you want to buy a new car and plan to enter into a leasing agreement for 3 years, then of course you will overpay for leasing compared to a loan agreement with a bank, but the amount will not be significant.
But if you want to give your car to a leasing company every three years in exchange for a new car (under a new leasing agreement), then you will lose significantly more compared to car loans.
To summarize, we would like to note that buying a car not with your own money in any case leads to overpayment and loss of your money. Remember that in addition to , you lose money on overpayments under leasing or lending agreements. After all, no one will give you money completely free of charge. The bank and the lessor must earn money to justify their activities.
Therefore, whenever possible, purchase a car with your own funds or with cash that you borrowed from the bank for improper use. With this form of purchase, you only lose the difference between the purchase price of the vehicle and the market price for which you can sell the car after three years. and we don’t take anything else. This is a topic for a separate article.
So, based on our example above, having bought a three-door Ford worth $18,000 with your own money, after three years you can sell it at average market prices (for about $10,000). Due to the natural depreciation of the vehicle, you lose $8,000 (not including all other costs associated with owning a car). Agree, this is much better than losing much more on a car loan or leasing.
Is it possible for individuals to lease a car without a down payment? After all, for a financial company, a down payment when an individual purchases a car reduces possible risks. That is why not everyone is ready to agree to the conditions for a client to purchase a car without an initial investment.
What is
Buying a car on lease has been known on the Russian market for quite some time. But this service provides favorable conditions for individual entrepreneurs and legal entities. Initially, the “Law on Leasing” (see full version), which was issued in 1998, initially excluded the possibility of using such a financial instrument by individuals.
In 2010, its wording changed slightly and the phrase "for commercial use" was reworded. It is difficult to say whether this has added to the popularity, but individuals have the opportunity to take advantage of such a financial instrument of the modern market.
Therefore, quite recently, some financial institutions began to offer conditions for leasing the purchase of a vehicle for individuals.
The point of such a deal for purchasing a car is that it combines the old ways of purchasing a vehicle: buying and leasing. Leasing itself provides conditions for renting a car with phased payment, which provides for the possibility of a complete transfer of rights to the property upon completion of the client’s financial obligations to the financial structure.
This means that an individual signs a leasing agreement with a company and uses a car for the amount of money specified in it, and upon completion of all obligations, the car becomes the property of the person. This is the main difference from renting.
Where to buy?
Let's look at some companies that operate in the financial market of the Russian Federation and offer leasing programs for the purchase of motor vehicles for individuals.
Here are some of them and the working conditions for the programs:
| Name | Cost, thousand rubles. | Duration of contractual obligations | Advance payment (yes/no) | Additional features |
| Major | From 300 to 6000 | from 1 year to 3 years | It is possible to obtain additional discounts when making a down payment of 49% or more | |
| Europlan | no more than 3000 | from 1 year to 3 years | yes (from 20 to 49% of the amount) | When leasing, additional services are given as a gift (insurance, coupons for discounts on fuel purchases, etc.) |
| Control Leasing | From 400 to 7000 | from 1 year to 3 years | yes (from 10 to 49% of the amount) | It is possible to control payments and draw up contracts remotely |
| Stream | From 400 to 5000 | from 1 year to 3 years | it is possible to register without an advance payment or to pay at least 20% of the amount | The company works with KIA vehicles |
| Alfa Leasing | no more than 4000 | from 1 year and 1 month to 4 years | yes (from 5 to 49% of the amount) | Wide selection of vehicles, quick solution to the issue |
As you can see, not all financial companies that operate leasing programs for the purchase of a car by individuals provide the opportunity to purchase goods without a down payment.
Video: Pros and cons
How to register a car without a down payment?
In order to realize your desire to purchase a car through leasing without an initial investment in the purchase, you should analyze the factors that may influence the decision of a financial institution.
Here's what to consider when making a decision:
- financial situation of the potential client;
- is there an opportunity to sell vehicles on the secondary market in the future;
- can the client provide other guarantees (collateral, guarantees from other persons).
Also, an important factor in the company’s decision may be previous successful cooperation with the client. For regular customers, many make exceptions in the conditions and meet them halfway.
But these factors apply more to companies that do not operate special programs in their work that are designed for non-advance registration of relationships. If you find a company that offers just such a program, the above factors do not play a special role for the leasing company.
Such software products imply that the supplier assumes all possible risks, so the financial structure in this case is insured against monetary losses.
Conditions for legal entities
The main indicator by which the benefit of a particular leasing company is determined is the % increase in price, which is calculated for one year.
If you do not take programs that promise 0%, then the average figure will be approximately 2 to 5% for a legal entity. At the same time, the organization acquires a number of advantages when purchasing a car through a leasing company, compared to lending.
Let's compare them in the table:
Conditions for individuals
If you take out leasing to purchase a vehicle for an individual, then the percentage increase in price for companies that work in this direction will be as follows:
This indicator is influenced by the amount of the advance payment.
Required documents
For an individual who plans to rent a car under a leasing program, the following documents are necessary for all financial institutions:
- passport of a citizen of the Russian Federation;
- identification code.
Some organizations may require additional certificates:
- certificate of income for the last 6 months;
- extract from the work book;
- insurance policy;
- another document that confirms identity (pension card, military ID, etc.)
Requirements for the lessee
All the requirements that the financial lessor puts forward in relation to the potential client can be divided into: basic, inherent in all financial organizations, and additional.
The table shows the above conditions that the lessee must meet:
Transport requirements
Most leasing companies work directly with their fleet or cooperate with automobile corporations, providing an opportunity for an individual to purchase the necessary transport.
The main condition for providing leasing for the purchase of vehicles is its liquidity.
There are certain requirements for cars that are planned to be purchased under the leasing program:
Deadlines
The standard period for formalizing contractual relations for the purchase of vehicles for individuals on leasing terms is considered to be a period from 1 to 3 years. Some companies may extend the period to 4 years.
In the market for such financial services, you cannot find a leasing company that would agree to a longer contract period.
How does the deal work?
The lessee, having come to the leasing company with the necessary package of documents and having decided on the make of the car, writes an application for granting him a lease for the purchase. The review and approval process itself does not take much time.
One of the mandatory stages of car leasing is insurance, which in most cases is issued for the entire duration of the contractual obligations.
The agreement is signed with the agreement of the lessee and the lessor with all the conditions set out in it. Next, the vehicle is transferred to the client for use, but the latter fulfills all the terms of the contract (passes technical inspection, ensures storage conditions, etc.).
Today, more and more companies provide car leasing services in the Russian Federation. Each of them is competing for potential customers. Therefore, finding a good option with favorable car leasing conditions for an individual will not be difficult.
