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Old 10th May 2019, 11:46   #241
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Looking for some advice.

As per current employer lease calculation for a small car, it appears that the IT saving of 31% on the car lease allowance is directly offset by the 31% of GST on lease amount.

Am I missing something here? Thanks.
31% GST is part of Ex-showroom price. Even you buy the car on your own, you have to pay 28% GST. So you loose only 3%. Chances are that the lease company would match the ex-showroom price by lowering basic rate. Do confirm with your lease provider.
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Old 10th May 2019, 12:22   #242
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Thanks, I thought the calculator provided was based on the same ex-show room price as for regular purchase - let me check with the lease provider and get back.
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Old 17th May 2019, 00:03   #243
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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31% GST is part of Ex-showroom price. Even you buy the car on your own, you have to pay 28% GST. So you loose only 3%. Chances are that the lease company would match the ex-showroom price by lowering basic rate. Do confirm with your lease provider.
I have confirmed this, you are right.

It appears the GST gets deferred for the one taking the lease. There will of course be extra GST on the mark up of the lease provider.
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Old 8th June 2019, 11:34   #244
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Thanks GTO,
That post was an eye opener. Also the link to the two leasing company has broadened my scope. I have a fleet of 15 vehicles from scooters, to bikes, to cars to heavy goods trucks. Leasing a added benefits will surely let me work out my economics better. Take a bow! You deserve my standing ovation.
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Old 13th June 2019, 09:14   #245
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Pardon for the noob question. How does the lease program from Hyundai and Mahindra differ from Orix and others? Does it apply to individuals?
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Old 19th June 2019, 15:16   #246
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Just wondering , what happens when an employee who has taken a car on lease from his employer dies ? Does employer (lessee) settles it with the lessor ( e.g. oryx) directly ? What if the outstanding amount is more than what the employer owed to their employee as part of the settlement ? Car loan is a debt but is car leased a debt from an employee's perspective ?
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Old 26th June 2019, 16:50   #247
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Has anybody made use of Maruti's N2N lease option for Corporate /self employed users?
Bumping this up. Guys, Can anyone share their experience of N2N? Helping out a friend who's interested to lease a car for business.

Car in question is an Eeco 5Str AC + CNG. Any alternatives? Looking only at options that include maintenance and tenures of 36-48 months.
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Old 6th November 2019, 14:19   #248
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Originally Posted by hondafanboy View Post
Just wondering , what happens when an employee who has taken a car on lease from his employer dies ? Does employer (lessee) settles it with the lessor ( e.g. oryx) directly ? What if the outstanding amount is more than what the employer owed to their employee as part of the settlement ? Car loan is a debt but is car leased a debt from an employee's perspective ?
My company has a tie up Ortix. In case an employee dies, the family has no financial obligation whatsoever. Of course, Ortix will take back possession of the car.
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Old 16th December 2019, 18:17   #249
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

One of my friend is looking to get the Seltos on lease. He has sent me details of costing and when compared to self purchase on loan, leasing saves whopping Rs. 2.64L if you factor in income tax saved on monthly lease amount.

Till now I was under impression that leasing from company does not yield any benefit. I have attached screenshot of calculation please let me know if I am missing something.

Edit: Lease finance rate is pretty low as I understand. But still it turns out cheaper.
Attached Images
  

Last edited by sushantr5 : 16th December 2019 at 18:29.
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Old 16th December 2019, 19:14   #250
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Edit: Lease finance rate is pretty low as I understand. But still it turns out cheaper.
I think, I am wrong in assuming that interest rate is low. I guess total payout is equal to Monthly Lease (- GST ) and final Purchase Price. Which comes around 12% interest rate.
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Old 30th January 2020, 23:55   #251
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

Anyone here from Mumbai who has got a car on lease? Had a few doubts to clarify. Thanks
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Old 31st January 2020, 09:14   #252
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Originally Posted by sushantr5 View Post
Till now I was under impression that leasing from company does not yield any benefit. I have attached screenshot of calculation please let me know if I am missing something.

Edit: Lease finance rate is pretty low as I understand. But still it turns out cheaper.
It is beneficial. The main issue came up due to the double taxation policy of the Govt when the movement from VAT to GST happened and for Lease schemes taken before GST.

Post GST, the Lease schemes are comparable to how they were prior to GST. The Excel Calculation assumes a maximum utilization of all benefits provided like Fuel Expense Claim, chauffeur allowance etc. Some companies ask for Fuel Bills and some don't. Depending on those aspects one needs to make a realistic evaluation/forecast of how much of the theoretical calculations can be realized for real.
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Old 31st January 2020, 10:23   #253
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

I am planning to upgrade to SUV in the coming months and I am faced with a dilemma of whether to go for company Lease or loan on my own. As per the previous posts, company lease has benefits for sure. However there are few considerations which I think will be important.

1. Some companies (including mine) have fixed percentage of own contribution and finance amount. e.g. 20% own and 80% finance. Thus even if I have funds for my own contribution, I cannot increase the contribution beyond 20%. Also tenure of 7 years is not possible.
2. After taking the lease, if I decide to leave the organization before the lease completes, I will either have to transfer the lease to someone else (can be tricky) or transfer the vehicle in my name by paying the remaining principal amount. Now this amount can be quite big depending on the vehicle price and lease tenure completed.
3. My company provides transport service from home to office, however if I take car lease from company (and hence avail tax benefits) then I cannot use company provided transport as it conflicts with some tax rules set by Govt. Thus if I take car lease, then I don't have a choice to use company transport, which actually is quite convenient.

So its a decision time whether to go for lease or use own loan option! I am not sure if anyone else has faced the same considerations.
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Old 31st January 2020, 15:35   #254
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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2. After taking the lease, if I decide to leave the organization before the lease completes, I will either have to transfer the lease to someone else (can be tricky) or transfer the vehicle in my name by paying the remaining principal amount. Now this amount can be quite big depending on the vehicle price and lease tenure completed.
I think the Point 2 that you called out is the most important one. An exit from the company midway will mean that the forecasted benefits are gone and one has to bear a huge amount to take up the car. I have seen several folks leave the car in such scenarios - especially when buying higher end ones such as an XUV 500 or an Innova - it becomes a burden to foreclose the lease.

I played a safe game. Rather than using the Lease as an option for my primary car, I used it for buying a smaller automatic for my wife. This was the best decision, as the impact of Double Taxation due to the move to GST on Small Petrol cars was the minimum and it was bearable.

LeasePlan provided an option for 2 Year Lease which seemed like an extremely low risk option as the tenure is less and I smoothly completed the lease period in mid 2019 and paid the residual value and now own the car.

Another important aspect is to see if your Lease provider is providing a fixed Residual value or if they are proposing a market value linked residual value. In the scheme that Lease Plan offered, I had a fixed Residual Value of 35% at the end of 2 years which made it a good deal. For longer Tenures they offered a fixed Residual Value of 25% irrespective of the car brand or model.
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Old 8th February 2020, 11:51   #255
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Default Re: ARTICLE: Lease OR Loan? Which EMI is better for you

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Originally Posted by sushantr5 View Post
One of my friend is looking to get the Seltos on lease. He has sent me details of costing and when compared to self purchase on loan, leasing saves whopping Rs. 2.64L if you factor in income tax saved on monthly lease amount.

You've not considered tax saving on depreciation in the own option. Perhaps because this is for a salaried person.
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