Now more than ever companies and individuals are acquiring their assets through each of those two methods, the newest option in the market is renting that differs from the original leasing, and many people wonder what is the best option, even if renting is considered the best option in most of the cases, the leasing option can also be very appealing, it all will depend on the needs of the user, here we explain what is the difference and also what is the best option depending on the different cases.
The leasing consist on a rental contract with a purchase option at the end of it, where the payments done along the contract are proportionally considered as part of the purchase price if the client takes the purchase option at the end of the contract, in this modality the monthly interest is the main expense that can be used as write off for tax purposes.
Some of the advantages of utilizing a leasing are the insurance policy, preventive maintenance, the annual circulation permit and inspection is covered by the lessor, the purchase costs are lower than in regular purchase or vehicle loan, and finally there is no obligation related with the asset unless the holder decides on making the purchase at the end of the contract. The cons are it requires a prime payment of at least 25% of the value, the vehicle is depreciated and since its’s not owned the lessee, the lessee has to cover all the expenses related to maintenance, repairs, taxes and inspections and the contracts are extended for periods from 3 to 8 years, no short term options.
The renting option becomes more suitable if the person or company is not looking for possessing the asset, and if the asset is used for an economic activity, specially under this conditions it became the best option, this because 100% of the renting bill works as write off for tax purposes, this added to the fact that the renting covers all the expenses related to the vehicle makes it the best option.
Between the advantages of the renting we can mention the lease periods for even under 6 months, it doesn´t need any initial deposit, this is specially attractive for business owners since they don´t have high investment costs for acquiring the asset, the rates are 100% usable for tax purposes, the formalization time is very low compared to other forms of lease, and another huge advantage is the maintenance, repairs, insurance, tires, inspections and all the expenses ¨but the gas¨ are covered by the lessor.
The renting is gradually becoming the best option, specially for business owners since it allows to obtain a temporary asset without the typical obligations that comes along it.
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