Go Back   Team-BHP > Team-BHP > Team-BHP Advice > On buying a car


Reply
 
Thread Tools Search this Thread
Old 5th November 2013, 22:06   #166
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

In my case the down payment was done directly to the dealer.

The final invoice was issued indicating the down payment as the advance payment, so the leasing company released payment only for the balance amount.

In my opinion the down payment alters/reduces profit/gain you would get from the tax benefit and interest gain if that money was invested else where.

I don't see a risk, if you choose to exit the leases before the tenure or even at the end of the tenure, you will have to pay the exit amount any way.

Am I missing something when you say risk?
ajitkumarlb is offline   Reply With Quote
Old 6th November 2013, 09:57   #167
BHPian
 
Join Date: Jul 2009
Location: Bangalore
Posts: 518
Thanked: 151 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Operating Lease works this way. Once you settle the amount, the leasing company provides two copies of form 35 and a NOC to RTO and Insurance company. With this you need to first cancel the Hypothecation on your RC Book from the RTO. Post that you can transfer the vehicle in your name from the company. For this you will need form 29, form 30 and clearance certificate from the company. Once you submit all this, the RTO will transfer the vehicle in your name.
prabhuferrari is offline   Reply With Quote
Old 16th November 2013, 01:28   #168
BHPian
 
CR-V's Avatar
 
Join Date: May 2008
Location: Delhi
Posts: 184
Thanked: 14 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Just saw this thread, will drop a email to HR guys on monday.

Is this something that can only happen if the company has lease car option? or you just approach the lease car company directly?
CR-V is offline   Reply With Quote
Old 18th November 2013, 15:12   #169
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Your company should offer this facility and would have already tied up with a leasing company.
ajitkumarlb is offline   Reply With Quote
Old 20th November 2013, 23:01   #170
BHPian
 
CR-V's Avatar
 
Join Date: May 2008
Location: Delhi
Posts: 184
Thanked: 14 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

No reply from HR yet. But asking around among colleagues doesn't seem my company have any such tie up. So I am out of luck in that case? From the sounds of it one off leasing doesn't seem common.
CR-V is offline   Reply With Quote
Old 21st November 2013, 12:02   #171
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

I have heard the high value cars, and I have seen an ad long back for Merc, which has this leasing option from the dealer... not sure if there are any such options for other cars.

Yet the main advantage of leasing when taken from the company is the tax benefit, without which a regular car loan would be the option.

Perhaps the dealer leasing option works for those who own a business who can show this as expense without having to deal with the depreciation of the car if bought.
ajitkumarlb is offline   Reply With Quote
Old 23rd December 2013, 14:06   #172
Newbie
 
Join Date: Sep 2007
Location: Mumbai
Posts: 4
Thanked: 0 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Dear Fellow Bhp’ians.
Need your expert point of views opinion on this –
I opted for my company car lease policy back in 2012 from my employer, and got myself a Vento on the Orix 3 lease plan. The car is Mumbai ( MH02) June 2012 registered, a Black highline diesel and has appx 16 k clicks till date.
The invoice price at the time was Rs 11.5 lacs. Till date, the car has cost me Rs. 8.17 lacs ( i.e Rs 1.33 lacs - ( upfront RV etc ) + Rs 6.84 lacs ( i.e Rs 38 k monthly EMI x 18 months )
I’m moving on form my current company, as a result I have to either foreclose the lease, or transfer the lease to a personal one. Now here’s the issue, as I look at it–
1. I’m taking a sabbatical from work for the next few years– so the option to transfer the lease to new employment does not exist.
2. Transferring the lease to a personal one means – no tax rebate and a substantially high monthly outgoing of Rs. 38 k for a 6 lacs rupees book value on vehical.
3. Foreclosing the lease means I end up paying Rs 6.21 lacs ; over and above the Rs 8.17 lacs already paid. ( i.e Rs 1.33 lacs upfront + Rs 6.84 lacs lease EMI’s paid from July 2012 till Dec 2013)
4. Selling the car ( post foreclosure ) – I lose Rs 5.69 lacs ( Rs 6.21 foreclosure amount + 1.33 lacs upfront down payment + Rs 4.85 lease EMI’s till date ( Rs 6.84 lacs less 30% towards appx tax benefit gained till date ) ) – ( estimated market resale of Rs. 6.7 lacs as on date )

I wanted your thoughts / suggestions on – the best way forward for my situation, and any alternate suggestions to minimize losses.
TheMufi is offline   Reply With Quote
Old 23rd December 2013, 19:52   #173
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Sabbatical! Wow! enjoy your break... Wish I could take one


On the car, I had sat with an excel sheet cracking my head out on this, when I went in for my lease, working out all 'possible' permutations, end result: I went in knowing full well - if I don't complete the tenure, I will be in loss.


What matters in my opinion, is what you want-

Do you want to retain the car or get rid of it?
Do you want to retain cash in hand during your break?
Do you not mind having an EMI going forward?

I know I am not giving you an answer but more questions, but answers to some of these would help with the decision and the least loss subject to that...

Last edited by ajitkumarlb : 23rd December 2013 at 19:53.
ajitkumarlb is offline   Reply With Quote
Old 24th December 2013, 14:45   #174
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

There is another option that is in practice in my company, i.e. transferring the vehicle to someone in the organization.

That way the person will continue to pay the remaining EMIs and will be marked as the user going forward.

Saves the trouble of transferring at an RTO, clearing the loan...


For the amount you have already paid as the EMI till date + any accessories you have added: you can charge the person around 70% to 80% of that total amount.


Generally I have seen the insurance companies calculating the vehicle cost/depreciation like this:

They only take the Ex-Show room price.
First Insurance IDV: 5% less than the Ex-Show that year
Second year Insurenace IDV: 20% less than Ex-Show current year
Third year Insurance IDV: 30% less than the Ex-Show current year
ajitkumarlb is offline   Reply With Quote
Old 23rd January 2014, 16:04   #175
BHPian
 
shayonpal's Avatar
 
Join Date: Apr 2013
Location: Gurgaon
Posts: 42
Thanked: 8 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Is there any way to lease a car on my personal name? If so, then what are the procedures to go about it? And will that still be economically viable?
shayonpal is offline   Reply With Quote
Old 24th January 2014, 11:08   #176
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

I don't think that is possible when leasing from company - however that would be good as the RC book will have our name as the first.

From my earlier post:

I have heard the high value cars, and I have seen an ad long back for Merc, which has this leasing option from the dealer... not sure if there are any such options for other cars.

Yet the main advantage of leasing when taken from the company is the tax benefit, without which a regular car loan would be the option.

Perhaps the dealer leasing option works for those who own a business who can show this as expense without having to deal with the depreciation of the car if bought.
ajitkumarlb is offline   Reply With Quote
Old 29th March 2014, 12:55   #177
BHPian
 
Join Date: Sep 2007
Location: chandigarh
Posts: 48
Thanked: 15 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

would like to have more clarity on this point of leasing for self.Is it a better option than outright purchase.

Last edited by Ramanjit : 29th March 2014 at 13:03. Reason: similar post on the thread,somehow missed reading it earlier.
Ramanjit is offline   Reply With Quote
Old 21st April 2014, 15:50   #178
Senior - BHPian
 
DCEite's Avatar
 
Join Date: Sep 2004
Location: NCR
Posts: 2,919
Thanked: 333 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Folks i have a question.

Suppose i take a car on company lease, but for some reason i need to leave the organisation before lease is over.

Now in this case, as i understand, i have to pay back the lease company the outstanding loan amount and get the car registered in my name (this process is also known as foreclosure).

Now suppose i do not have enough funds to buy out the car in my name for foreclosure of lease. In that case - can i take a loan from a Bank - in the same way as one takes car loan for a Second hand car? AFAIK - since the car will be transferred to my name if i foreclose the loan, it will be treated as a second hand car. So theorotically atleast any Bank which provides car loan for a second hand car (albeit at a higher rate than a new car) - should be able to provide the loan ?
Am i correct or am i missing something.
DCEite is offline   Reply With Quote
Old 21st April 2014, 16:17   #179
BHPian
 
ajitkumarlb's Avatar
 
Join Date: Sep 2006
Location: Bangalore
Posts: 221
Thanked: 86 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

yes you should be able to get a loan, approach the 3rd party that is handling the lease, they might have some deals as well.

worst case a personal loan could be a solution...
ajitkumarlb is offline   (1) Thanks Reply With Quote
Old 21st April 2014, 17:12   #180
Senior - BHPian
 
DCEite's Avatar
 
Join Date: Sep 2004
Location: NCR
Posts: 2,919
Thanked: 333 Times
Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Quote:
Originally Posted by ajitkumarlb View Post
yes you should be able to get a loan, approach the 3rd party that is handling the lease, they might have some deals as well.

worst case a personal loan could be a solution...
Thanks for that input.

One more question, suppose i change my job before lease (say within 1st year) in a company which provides leasing through the same vendor (say Leaseplan), in that case will the lease be transferred or will i have to pay foreclosure penalty and Road tax+insurance and then start a fresh lease in the other company ?
DCEite is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
The Cheap Loan or the Smart Loan - SBI Advantage Car Loan keyur Indian Car Loans & Insurance 200 27th November 2016 11:55
ARTICLE: How to get the lowest EMI & the best Finance Deal GTO On buying a car 192 9th September 2016 10:02
Car Loan - EMI - Varying Interest Rates torquarius Indian Car Loans & Insurance 4 15th February 2011 18:08
Car Loan (EMI's) transferrable?? rohanverdes1 Indian Car Loans & Insurance 3 6th October 2009 16:39
Lease or loan? Pro's and Con's of each. Rtech Indian Car Loans & Insurance 16 4th October 2006 16:50


All times are GMT +5.5. The time now is 11:37.

Copyright ©2000 - 2016, Team-BHP.com
Proudly powered by E2E Networks