Car leasing – a new option!

By | October 9, 2012

With boom in the economy of the country there is increased activity in kinds of corporate houses. This has led to a sharp rise in the requirement of vehicle by the corporate which have now adopted a new scheme called car leasing. It is estimated that annually about 6 Lakhs cars financed every year are for the sole purpose of being used by the corporate sector. This has become a booming business for many who find it a convenient option to avail a car loan and let the EMIs be paid from the monthly earnings from the corporate lease.

Key Benefits of the Car Leasing Concept


There are advantages for all the parties involved in a car lease scheme which is what has led to the rise in its popularity as a viable option for travel requirements of corporate houses.

  • By taking a car on lease the company does not have to make the initial investment in the purchase of the car.
  • There are no botheration of maintenance and upkeep because this is looked after by the persona owning the car. Employment of the driver also in most of the cases is catered by the owner.
  • The hiring corporate can show payments towards the car lease as part of business expense to avail tax benefits.
  • Since the lease of the car is for a specific period only with arrangements of renewal there is no hassle of depreciation on the asset of the company.
  • The corporate can provide its employees the promised luxuries and perks without having to shell out any sizable amount for buying cars.
  • The suppliers also find this arrangement convenient as they have ready markets for the cars they buy with easy car loans.
  • The EMI of the car loan and the maintenance cost is covered through the lease money that the owners receive from the company hiring the car.
  • At the end of the repayment period of the car loan which is about 5 years the car would have paid for itself and will be free of cost for the owner who is then at the liberty to use it further to generate income or dispose it off by selling and make some instant money.
  • The arrangement is equally good for the car financiers across the country. With the demand for car leasing on the rise they are finding more and more customers for their car loan products.
  • Financiers find it more convenient to provide car loans to parties that have car lease ready as the repayment part is assured in such cases as the car now becomes an earning asset.
  • The financiers have come up with special schemes and offers to encourage people to buy cars with their car loans for the sole purpose of leasing.

Due to these and many other benefits for all parties involved the concept of car lease through the car loan route has grown exponentially in the past few years. There are several established national and international car lease companies such as Arval, Lease plan and Hertz who planning significant expansion in their operations in the near future to be able to provide the facility across the country. Additionally the major car financing companies are also creating separate segments of business to cater specifically for the car loans required for the purpose of leasing arrangements.

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