Toyota motors has given me an attractive offer under the so-called Lease Financing with free insurance, lto, chattel mortgage.
Under this so-called lease financing, are there disadvantages as compared to the bank financing?
I'm afraid there are some hidden charges or unexplained expenses later.
I shall appreciate any comments from my fellow tsikoteers.
Ang lease financing is you can return the car after the lease contract expires. So you pay them a monthly. Parang rental eh. Unlike bank financing you are paying your monthly to eventually OWN THE CAR. Sa lease its just like a rent pay them your monthly then you can continue to use the car as if its your own. IMO go for bank financing na lang at least in the end you own the car. Ang advantage lang ng lease is mas mababa yung monthly and pag sawa ka na sa kotse mo pwede mo isoli after the lease agreement expires.
__________________ http://www.santafeclubph.com/ "if you want to continue to be the slaves of bankers and pay the cost of your own slavery,then let bankers continue to create money and control credit." Sir Josiah Stamp
Ang lease financing is you can return the car after the lease contract expires. So you pay them a monthly. Parang rental eh. Unlike bank financing you are paying your monthly to eventually OWN THE CAR. Sa lease its just like a rent pay them your monthly then you can continue to use the car as if its your own. IMO go for bank financing na lang at least in the end you own the car. Ang advantage lang ng lease is mas mababa yung monthly and pag sawa ka na sa kotse mo pwede mo isoli after the lease agreement expires.
Really. What I heard from the sales was that the car would be under the ownership of Toyota but once I fully paid it, the ownership would be transferred to me. Hmmmm. Iba na to.
But then if it is rental, kalaki naman ang monthly na 15, 373 for the Innova J and my down pa na 165,600.
Anyway, sir Tidus, iba rin yung lease-to-own sa lease financing?
Ah baka lease to own yan and NOT LEASE FINANCING... Well I haven't inquired since di naman ako interesado I was just assuming my posts based on the thread title...
__________________ http://www.santafeclubph.com/ "if you want to continue to be the slaves of bankers and pay the cost of your own slavery,then let bankers continue to create money and control credit." Sir Josiah Stamp
Lease financing has its advantage in terms of business perspective.
Kapag naka lease ang sasakyan mo na ginagamit mo sa business, pede mo siyang i-declare as expense sa BIR to get a tax deduction. Hindi pa subject sa depreciation ang leased property kasi hindi siya sa iyo.
Meron ilang lease agreement na pagdating ng expiration ng term ay mag-execute na kayo na deed of absolute sale para maging sa iyo. Yung down-payment mo will be considered as "deposit" or security for any damages pag katapos ng lease or you can apply it as the payment for the deed of sale after the expiration of the term para maging sa iyo na.
So in effect parang bentahan lang din ang nangyari, but you will get the advantage of tax deduction. Beneficial din ito sa nagpapautang kasi kapag hindi ka nakabayad, they can get the vehicle because technically, they still own it unlike in the financing.
Really. What I heard from the sales was that the car would be under the ownership of Toyota but once I fully paid it, the ownership would be transferred to me. Hmmmm. Iba na to.
But then if it is rental, kalaki naman ang monthly na 15, 373 for the Innova J and my down pa na 165,600.
Anyway, sir Tidus, iba rin yung lease-to-own sa lease financing?
Get the payment schedule with them and the options (like if you can buy the car at x% residual value) at the end of the lease period. And then, compare it with the regular car financing scheme...
7808
__________________ "Life is what happens to you while you're busy making other plans"......... JL "Government is not the solution to our problems. Government is the problem".. RWR
Yup, tama si Robenson. Malaki ang impact ng lease sa books. Normally, motor vehicles have an economic life of 5 years, and you have to amortize the depreciation over 60 months, kung nakapangalan sa company yung assets. Majority of firms kasi who lease vehicles opt for fleet financing, so you can just imagine the depreciation cost of several vehicles in their books.
Another advantage is that normally, interest rate on leasing is computed via diminishing balance, whereas straight-line interest ang bank financing (at least in our case, hehehe).
Of course, if you don't have a business, better go for bank financing.
__________________ "Ein Staat, Ein Reich, Ein Volk, Ein Fuhrer!"
Just to add my 2 cents on lease financing, I heard that at the end of the lease period, the balloon payment you have to pay the financing company at the end of the lease term is still substantial. So, there's really no advantage to you if you're buying it as an individual.
^^^ Don't know about other leasing companies, but in our case, we don't have a balloon payment scheme at the end of the lease period.
In the US, there are strict standards leasing companies have to follow:
Quote:
Treatment in the United States
Under US accounting standards, a finance (capital) lease is a lease which meets at least one of the following criteria:
ownership of the asset is transferred to the lessee at the end of the lease term; the lease contains a bargain purchase option to buy the equipment at less than fair market value;
the lease term equals or exceeds 75% of the asset's estimated useful life;
the present value of the lease payments equals or exceeds 90% of the total original cost of the equipment.
Following the GAAP accounting point of view, such a lease is classified as essentially equivalent to a purchase by the lessee and is capitalized on the lessee's balance sheet. See Statement of Financial Accounting Standards No. 13 (FAS 13) for more details of classification and accounting.
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Yun nga lang, the operative phrase is "at least one of the following criteria..."
__________________ "Ein Staat, Ein Reich, Ein Volk, Ein Fuhrer!"
Lease financing has its advantage in terms of business perspective.
Kapag naka lease ang sasakyan mo na ginagamit mo sa business, pede mo siyang i-declare as expense sa BIR to get a tax deduction. Hindi pa subject sa depreciation ang leased property kasi hindi siya sa iyo.
Meron ilang lease agreement na pagdating ng expiration ng term ay mag-execute na kayo na deed of absolute sale para maging sa iyo. Yung down-payment mo will be considered as "deposit" or security for any damages pag katapos ng lease or you can apply it as the payment for the deed of sale after the expiration of the term para maging sa iyo na.
So in effect parang bentahan lang din ang nangyari, but you will get the advantage of tax deduction. Beneficial din ito sa nagpapautang kasi kapag hindi ka nakabayad, they can get the vehicle because technically, they still own it unlike in the financing.
Hope it helps.
Additional info ito sa akin. I'll just reiterate that I am specifically referring to the Toyota Phil promo for the month of April in which they offer free insurance, lto, chattel, etc.
I inquired at Toyota Bicutan with their sales Mr. LLoyd Guirindola asking thru e-mail concerning their lease financing or lease-to own and he confirmed that when I shall have completed payment of the 60 months installments, Toyota would transfer ownership to me. He did not mention additional payment for the residual asset.
I just wonder who will renew the insurance after one year__me or Toyota?
I suppose it would be me.
As of now I would presume that since Toyota has a financing arm, it would be similar to a bank financing in RP but very much unlike that of the US lease system.
Additional info ito sa akin. I'll just reiterate that I am specifically referring to the Toyota Phil promo for the month of April in which they offer free insurance, lto, chattel, etc.
I inquired at Toyota Bicutan with their sales Mr. LLoyd Guirindola asking thru e-mail concerning their lease financing or lease-to own and he confirmed that when I shall have completed payment of the 60 months installments, Toyota would transfer ownership to me. He did not mention additional payment for the residual asset.
I just wonder who will renew the insurance after one year__me or Toyota?
I suppose it would be me.
As of now I would presume that since Toyota has a financing arm, it would be similar to a bank financing in RP but very much unlike that of the US lease system.
If you dont mind sir, pls post the agreement here and maybe we can help translate the legalese or accounting gobbledygook for you, free of charge
As to the residue, usually, yung downpayment which is treated as "deposit" will answer for that.
toyota's lease to own scheme is almost the same as a bank loan. their scheme is like rent to own. there is a lower interest assumption based on diminishing balance and depreciation factor since it will be under toyoto's ownership still.
but still, it would still be priced almost the same as a normal bank loan rate since there is the "rent" factor. i don't see any advantages since the lessor will still carry the expense of insurance and registration costs.
What is lease financing?
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