Q: Is leasing mainly for big business?
A: No. Individuals can enjoy the same advantages that
make it smart for large fleets to lease. Leasing may
provide:
* Low monthly rates.
* The opportunity for a minimal down payment.
* Simplified expense records for tax purposes.
* Availability of cash that would otherwise be
tied up.
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Q: Why do large companies lease?
A: Most frequently:
* To turn fixed assetes into working capital to be
used in the company's principle business.
* To convert fleet vehicles from capital items to
expense items, thereby increasing their "net worth"
as well as "borrowing power".
* To cut paperwork and administrative expenses
involved in fleet owneship.
* To get out of the used car business.
* To enhance the company image with late-model
vehicles.
* To remove fleet management responsibility out of
the company and into the hands of specialists.
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Q: What are the tax considerations?
A: Remember that tax laws change from time to time
and it is advisable to discuss this question with
your tax advisor.
* However, the current changes in the tax laws (i.e.
the reduction of interest and sales tax deductions
and the extension of depreciation tables) have
generally made leasing more favorable.
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Q: What kind of vehicles can be leased?
A: All makes and models with all available equipment
or options. However, a good leasing dealer will offer
advise as to the most practical vehicle(s) for your
needs.
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Q: What does it cost to lease?
A: It depends on the vehicle(s) you want and the
equipment you desire. Also on the type and length of
lease and anticipated mileage.
* The only way to get a dollar and cents answer is to
discuss your specific requirements with a reputable
leasing representative and let him/her develope an
actual rate for you.
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Q: Are there mileage limitations on leased vehicles?
A: Yes. One of the factors that determines a lease
rate is anticipated mileage. Should this limitation
be exceeded a mileage cost penality will be charged
(currently: 8 to 15 cents a mile). Most leases are
practical: if anticipated mileage is under 25,000
miles a year, and can be set for your individual
requirements.
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Q: How about insurance, taxes, and licensing?
A: These costs are the lessee's:
* Insurance coverage will probably need liability
limits increased to: 100,000/300,000 (bodily inj.)
and 50,000 (property dmg.). Most already have these
limits; But if you don't ~ This will increase your
insurance premiums (specially if there are young
drivers in the family). Consult with you agent to see
what effect leasing will have in your situation.
* Taxes are based on your county and state levies,
and are added to your base monthly payment. If you
move to a taxing jurisdiction that is higher/lower,
your total payment will change accordingly. This is
another advantage a lease offers over a purchase in
that you pay taxes on what you use ~ not the total
price of the vehicle.
* Licensing costs vary: approximately 90.00 a year,
and are you responsibility to maintain a current
registration.
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Q: How long is a lease contract?
A: Like purchase finance contracts, Automobile leases
are written to cover a specific number of months.
Most are leasing for a 24/36 month period; However,
you can lease up to 60 months, if you wish.
* You will recieve a payment coupon book or a monthly
invoice for the period you have chosen.
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Q: Can a lease be cancelled and the vehicle turned in
prior to expiration of the contract?
A: Yes ~ however, most lease contracts have
"premature termination" provisions which determine
any additional cost.
* Like a purchase finance contract, you will need to
call to get a "pay-off" in order to trade it for
another "purchased/leased" automobile.
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Q: What can be done with the car(s) and truck(s) we
now own, should we decide to lease?
A: Most leasing dealers will buy them from you or use
them as "trade-ins" to reduce your lease obligation.
* The leasing professional should be well-qualified
to analyze your specific transportation requirements,
and complete leasing service should be provided.
