What is Leasing?
Leasing is a contract where a user (the lessee) pays an owner (the lessor) to use a specific asset for a defined period, with the option at the end to purchase the asset or not.
Commonly leased assets include vehicles, machinery, office equipment, electronic devices, and heavy equipment. Ownership of the asset remains with the lessor and will only be transferred if the lessee chooses to exercise the purchase option.
What You Need to Know
01
Use assets without full upfront payment
Users can utilise assets through monthly rental payments, without the need for significant initial capital.
02
Clear written agreement
The contract specifies the type of asset, leasing period, payment amount and schedule, as well as other terms and conditions.
03
Periodic rental payments
Payments are made throughout the leasing period. Additional charges or fees may apply, depending on the terms of the contract.
04
Asset not owned by the lessee
The asset does not belong to the lessee, unless there is an option to purchase at the end of the leasing period.
Summary
Leasing enables users and businesses to access assets more flexibly without owning them. However, it is important to understand the contract, inspect the condition of the asset, maintain proper records, and assess affordability before making a decision.
These steps help protect credit consumers and ensure a smooth leasing arrangement.