BUYING VS LEASING
CAR LEASING |
CAR PURCHASE |
|
DOWNPAYMENT |
Usually 1 - 2 months inaccordance to leasing period |
10% - 20% of car price |
GUARANTOR |
Not required for corporate accounts. |
Requires a local guarantor for auto-financing. |
ACCOUNTING |
A leased car appears as a non-income generating asset in the books, affecting the performance of your assets. |
A car purchased with finance remains as a current liability in the accounts book. |
LIABILITIES |
No liabilities apart from the insurance excess. |
Full liability |
DEPRECIATION |
No impact on steep vehicle depreciation |
An estimation of 40% depreciation for the sale of a 2yr old car + financing interest |
MAINTENANCE/SERVICING |
Usually arranged by the leasing company |
Owner's responsibility |
REPLACEMENT VEHICLE |
Usually arranged by the leasing company |
Nil |
INSURANCE |
About twice the amount of a private car borne by the leasing company. |
Owner's responsibility |
PURCHASE CALCULATION
| Make/Model | Toyota Estima 2.4A |
| Price | $112,000.00 |
| Downpayment | $12,000.00 |
| Loan Amount | $100,000.00 |
| Interest Rate | 2.50% |
| Loan Period (Months) | 84.00 |
| Monthly Installment | $1,398.81 |
| Road Tax | $2,000.00 |
| Insurance | $2,000.00 |
| Maintenance | $500.00 |
| Cost Per Year | $21,285.71 |
| Amount Paid (2 Years) | $54,571.43 |
| Remaining Loan (2 Years) | $83,928.57 |
| Sale of Estima (2 Years) - 65% | $72,800.00 |
| Finance Settlement | -$11,128.57 |
| Total Loss (2 Years) | $65,700.00 |
