Quite often, you can see the recommendations of experts to get acquainted with the leasing of transport, before you apply for a well-known bank car loan. Today, a party to a leasing transaction can be both legal entities and ordinary citizens. Superficially, many people know about leasing, but few have detailed information.
Types of leasing companies
All leasing companies can be divided into two large groups; companies that cooperate with banking organizations and companies that operate independently. Companies that belong to the first group can enter into transactions with banking institutions in order to receive funds for the purchase of transport on very favorable terms and then arrange a leasing transaction with a client in need of this on other conditions. There are also situations when a leasing company is a subsidiary of a bank.
A considerable number of companies act in a similar way, but among them, there are those that manage their own means. It can be both small and fairly large leasing companies. Transactions with such companies are usually very profitable and yet there are some drawbacks here. The main disadvantage is the likelihood of concluding a deal with a fraudster, who after one or two years of work, having collected a large amount of money from clients, becomes bankrupt or simply closes.
In order not to become a victim of such a fraudster, not to be left without money and a car, it is very important to responsibly approach the choice of a leasing company. You should carefully study all the documentation, look at customer reviews and the timing of the leasing company.
Pitfalls of leasing transactions
Reading the description of leasing programs, it may seem that this is a very profitable option to get a vehicle. That’s just if you look at such transactions and study them carefully, it becomes clear that they have a lot of their shortcomings, and some are very serious.
The option with leasing is very beneficial for citizens who constantly want to drive new cars and change them about once every 2-3 years. In this case, you will have to constantly live on credit. If this option is not suitable, experts advise opting for the design of a conventional car loan.
If the borrower is counting on the fact that every few years he will be able to change the car under the trade-in program with the execution of a new leasing agreement, he should know that it is not always possible to carry out such a deal. In order for the leasing company to go for it, it is necessary that the transport used by the borrower for some time be in very good condition and not get into accidents. If the technical condition and physical wear and tear of the car do not correspond to those specified in the leasing agreement, the client will have to repurchase it.
It is also worth knowing that the client of the leasing company will have to additionally spend money on payment of dealer services, insurance, etc. Payments should be made on time, and if this is not done the transport will be more expensive due to the accrual of serious fines.