There are several ways to use a car without owning it. An example is the lease, that is, a long-term financial agreement between the customer and the company for the use of a car. In some respects it is similar to long-term car rental, but differs in some details.
In both cases, the customer makes monthly payments, but the company remains the owner of the car until the end of the contract. At the end of which, however, in the case of lease, there are several possibilities: return the vehicle, become its owner by paying a large final instalment, sign a new contract or extend the existing one.
If a person chooses leasing, a bit like what happens with the long term car rental, pay only for the use of the vehicle and when the contract ends you can return it. This method has a relatively low monthly payment.
Leasing, however, as mentioned, differs from long term rental for a series of aspects that we will analyze in detail later.
The leasing contract
But first of all let's understand better what leasing is.
This is a financial leasing agreement where the lessee obtains the right to use an asset, a car, for a specified period of time and for an agreed price. This price is called the lease payment. A lease agreement typically establishes key terms such as duration of the contract, what happens if the contract ends early and how much notice must be given before it can end, who pays for major repairs or replacements, and whether rent increases are possible during the contract.
Differences between leasing and long-term rental
It is often difficult to choose the right solution between long-term car rental, financing and leasing. It is important to understand the differences between the three options to choose the best one according to your needs.
La difference The main difference between long-term rental and leasing is that at the end of the first there is no possibility of becoming the owner of the asset, which can instead happen with the second.
The monthly installment of the long term car rental includes additional costs, which are not included in the leasing.
There are also differences between the two contracts from a fiscal point of view:
- as regards long-term rental by private individuals, there are no tax breaks;
- il leaseInstead, provides for a tax deduction.
Leasing also differs from financing, because the latter makes the customer immediately the owner of the asset from the moment the contract is signed, which does not happen with leasing, in which the ownership remains with the company until the end of the contract.
The advantages
Leasing is a great way to always have the latest technology and ensure a moderate monthly payment. This way you are not tied to a single product and you also do not have to worry about depreciation.
Leasing offers many advantages, but the main one is that the expenses are deductible fiscally. In this sense, it could be the best choice for VAT-registered companies.
Article published on 5 August 2022 - 07:20
