How the Lease Is Used as a Financing Vehicle

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Agreement between the owner and a tent defend future problems. The agreement obligates the renter to give payments within the specified time period. Otherwise, the specified action written in the agreement is taken by the required person. The rental condition cannot be changed until and unless the specified lease period has expired.
The method of leasing a car is mostly done by a financier. A financier can be a banker, investor or a person who is sponsoring you for a lease of the car. Financier act as a representative of a customer, buy a vehicle for him. After that customer leases that vehicle from his representative and obliged to pay a specified lease for a month. When the agreement is going to end, the customer can give the final installment of a lease and become the owner of that car. Customers can also plan for re-financing and renew the lease. He can also trade the car.
Car leasing has multiple benefits. The range of contract term starts for two years (minimum time period) and ended in five years. The interest rate must remain fixed throughout the specified period of lease according to the agreement. The lease rent is also fixed. Specified payment mention in the agreement is done in advance. Customers must mention the purpose of renting a car. It the car is used for business purposes than the specified tax mention by the government is paid by the customer. GST is included in car prices and can be claimed by the financier. Lease payments done in advance are for cash flow and tax deduction (Henning &amp. Lawrence, 2009).
The activity of leasing a car is mostly appropriate for partnership, companies, sole traders as well as individuals, who can’t afford to purchase a car in one go. The usage of a leased vehicle is mostly done for producing income including business activities. A suitable package for employees as well can give fees out of it.
The consumer gets the benefit as well as a drawback in the form of ownership. This asset is also devalued in the future, a major drawback in capital lease.