Quote:
Originally Posted by deepakhon  Hi GTO,
Thanks for this article. I too am considering lease option for my next car. But I see two disadvantages here:
1. The car is not registered on my name. If I purchase it at the end of my lease period, it will be considered as a used car. If I have to sell it, then there is a lot of explanation I need to do.
2. I should check if the same lease company exists if I change my company. Otherwise, I will have to analyze the clause in the agreement which will make my exit better. |
Hi,
I have been through this situation. I changed jobs in between the lease.
Frankly speaking you stand to lose in this equation if you change jobs in beginning. Since I did this when only one year was remaining, I did not lose much. Morover the fuel and insurance was being paid by company, so in effect I did not lose anything.
At the end of the lease period it depends on company to company. For most companies its simple.
At the end of the lease you pay 10% of the cost of the car and the car is in your name,
Now lets say your car was for 5Lac. At the end of 4 years you would pay 50,000 and the car will be in your name. But lets say the depreciated value of car was 2L, so 1,5L is your benefit and you have to pay tax on that, so another 50,000 gone. So at the end of lease period 1L will go out of your pocket.
Most lease agreements are made with the policy that an employee which stays for the entire lease period will reap huge benefits, but people who leave before that will pay penalty. This is the basic structure and so you cant do much about it. But then you can take a 3 year lease if you are sure of sticking around.
If you are moving from one big company to another, then there is another benefit, your lease can get transferred and you dont stand to lose anything. Most HR departments arrange for that if the company has such a policy.
Regarding your resale, you have to explain, since your one owner car would appear as if its a two owner car. but most sensible buyers understand this and know that it was a company lease which got transferred to the employees name.