A one stop solution -
Lease is the only method under which all related services relating to automobile procurement and usage are packaged into a convenient product with lower cash outflows Lease starts with car choice and financing of the car as per your budgeted monthly outflow and can include (optional services) everything in relation to your car – insurance, maintenance, lifestyle services, value adds, disposals etc."
A simple understanding -
At TranzLease we understand lease as a structured loan – in simple terms, it is an intelligent way of financing your dream car purchase that allows flexibility, lower EMIs, tax benefits (in certain cases) and a host of ancillary products and services that go together to create an Automobile Lifestyle for you. TranzLease is all about a one-stop solution to all your needs for your dream car.
Lease popularity -
In US around 60% and in EU around 40% of cars sold are on lease. Reasons are many and some of them are – lower EMI, off balance sheet funding, flexibility, total and comprehensive insurance and maintenance at better rates, etc. In India the trend is catching up fast; one of the main additional benefits of leasing in India is that employees can actually make a 30% tax saving as lease rentals will come out of their pre-tax salary unlike the EMI on auto loans which comes out of post tax salary.
Parties to the lease -
Technically, under a lease transaction there are 2 parties known as Lessee (borrower) and Lessor (Lender); the Lessor provides the asset funding together with a variety of services depending on the choice of the Lessee and such services cover the entire life cycle of the vehicle starting from choice of the vehicle to ultimate disposal.
Types of lease -
Lease can be of 2 types i.e. Finance Lease and Operating Lease; At TranzLease, we are only engaged in providing Operating Lease. Under Operating Lease, there is virtual ownership of the asset for such period as is required by the user – at end of lease period the purchase of the vehicle is optional. The main concept of lease here is to restructure the cash flows of a traditional finance lease (read finance lease = loan) to provide definitive financial benefits. This is achieved through a variety of measures, which include factors like –
- 1. Lower EMI base
- 2. No risk of resale value
- 3. Lower and cost effective insurance cover
- 4. Lower and cost effective maintenance cover
- 5. Better pricing through economies of scale
- 6. Tax benefits etc.
Lease as an HR tool for Indian companies -
Lease is an effective HR tool through which value conscious companies can provide substantial value to employees without the necessity of taking additional liability or increasing the overall CTC budget.