Car leasing – an alternative to credit?

What if you plan to buy a car for business purposes? Leasing comes in handy, and it now assumes different forms. In Poland, the number of entrepreneurs is growing every year. Business is slowly becoming fashionable and provides many, especially young Poles, a chance for development, professional freedom and much higher earnings than full time. More and more institutions, including banks, loan and automotive companies, are starting to meet new companies. Car leasing is an interesting and popular option for businesses.

Of course, among the financial products that companies use most often, we can find loans and all kinds of loans. Banks tempt entrepreneurs with low fees and attractive contract terms.

Leasing – what is it?

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Colloquially, this type of contract is called taking the car “on the company”. The product is addressed both to entrepreneurs who are forced to buy new vehicles from time to time and to those who are faced with the dilemma of how to finance their first company car. Leasing is simply one of the types of contractual civil law relations. One of the parties, in this case the lessor or the so-called financing party, transfers to the lessee or the lessee the right to use a specific item. The period and other contractual terms are naturally determined. In exchange for the possibility of using the object, the lessee undertakes to pay the leasing installment, i.e. a fixed fee, which is similar in nature to the rent for the premises.

Leasing in Polish law

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The concept of leasing is regulated by the provisions of the Civil Code, specifically Article 709. The law stipulates that the contract should be concluded in writing, which may constitute evidence in court. Only material things can be leased. It is not only about motor vehicles, but also about computer equipment and other goods that can be “rented”. The right to use a given item as part of a leasing contract should be paid to the monetary entity.

To understand the essence of a car lease, you need to know the different faces of leasing transactions. There are two main types of leasing: direct (when the producer of things is the financing entity) and indirect (operation between more than two entities). The leasing installment, in turn, consists of the so-called capital and interest component, in other words, the remuneration borne by the lessee for the benefit of the lessor. Leasing is divided into operational, financial, returnable and consumer leasing. The difference between them lies primarily in the tax consequences they bring.

Basic types

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One of the most popular types is operational leasing. It is nothing more than the handing over of the car for a specified period, which, in principle, is shorter than the period of significant operation of the leased vehicle. This model is attractive for entrepreneurs who have high revenues, because they can include the installment amount in the costs of obtaining it. Of course, the lessee is guaranteed the right to buy the car after the end of the contract. Financial leasing is the second most popular type.

In this case, the lessee can make the so-called depreciation, and the cost includes the interest part of each installment. Why such regulations? In financial leasing, the car is treated as a property component of the user, and as a result, among others, the need to pay VAT together with the first leasing installment.

Returnable and consumer leasing

Returnable and consumer leasing

It is hard to explain the essence of this type of leasing in short words. We deal with it when the enterprise has many fixed assets, but there is no money for it. The lessor therefore allows the possibility of giving cash for part of the company’s non-current assets. He takes these leases, of course. Consumer leasing is, however, the least common type. It is addressed to people who do not run a business.

The biggest advantages of this form of financing include the lack of the need to engage large amounts of money. Entrepreneurs also value this contract due to the possibility of tax optimization and VAT settlement. In Poland, the most popular subject of leasing is a passenger car, but many companies, due to their flexibility and attractive contract terms, decide to lease expensive agricultural machinery, trucks and even buses.

It all depends on your needs and expectations. Leasing is not recommended for owners who feel the need to change vehicles frequently. The contract is concluded even for several years, and in many cases lessors are protected against its early termination. The disadvantage may also be that the leasing applies almost exclusively to new, usually up to 5-year-old cars. Older models require frequent intervention by a mechanic, which is not profitable for leasing companies.

Leasing for young entrepreneurs?

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The market is opening to novice businessmen. They should not have a problem with the leasing contract. Most entities providing this type of service even have a special start offer for them. The financing party may, however, charge higher fees, including activation costs.

Despite the relative simplicity of the lease agreement and the clear rules for granting it, you should carefully read each of the conditions. If something raises our anxiety or raises questions – let’s consult with the lessor. First of all, let’s check all the fees and the total cost of the commitment. There are “leasing calculator” tools on the Internet – it’s worth using them. They will give us a full picture of the financial situation.

Leasing calculator – is it worth it?

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Many entrepreneurs are wondering if they will get into trouble following a contract. Everyone who thinks about taking such a step must realize that this is a kind – admittedly quite flexible – but still a costly commitment. One cannot forget that car leasing involves not only installments, but also fuel and insurance charges. It is worth analyzing the pros and cons of such a solution before making a decision. Certainly, an important aspect in this context is the very choice of the car and its engine. We write more about this in the article Diesel or petrol? Which engine will ruin you financially?

Leasing an alternative to credit?

In addition to leasing, there is of course a bank loan for a car. However, this option is not reserved for everyone. Entrepreneurs who have high do you need to know about it?). Leasing, in turn, is granted to almost every business owner, irrespective of his income and other criteria. creditworthiness can apply for this type of liability (more about its assessment can be found in the text Creditworthiness – what

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