Lease

How Leasing Works

The process begins by choosing the goods you wish to lease. Next, you’ll agree on a lease term, which dictates how long you’ll have the item (for example, 24, 36, or 48 months). You’ll typically make an initial payment, similar to a deposit, which will influence your subsequent monthly payments. A crucial part of any lease agreement is agreeing upon an annual mileage allowance if the goods are something like a vehicle. Throughout the term, you’ll make fixed monthly payments to the leasing company. Finally, at the end of the lease term, you simply return the goods to the leasing company.

For guidance on tax implications and to ensure optimal tax efficiency, please consult a
qualified tax advisor or accountant. Evogo Asset Finance does not provide tax advisory
services.

Features and Benefits of Leasing

Leasing offers several appealing features and benefits. It often provides the lowest monthly payments compared to other finance options, making it a very affordable way to access new goods regularly. For instance, if it’s a vehicle, leasing makes it easy to drive a new car every few years without the hassle of selling your old one. You’ll also benefit from fixed monthly costs, which helps significantly with budgeting, though other running costs will still apply. Many lease deals even allow you to include optional maintenance packages, covering servicing and repairs for added peace of mind.

Pros and Cons of Leasing

Pros:

• You’ll typically have lower monthly payments, making access to new goods more affordable.
• If it’s a vehicle, you can drive a new car more often, always enjoying the latest models.
• You avoid depreciation risk, as you don’t own the goods and aren’t affected by their resale value.
• You get a fixed monthly cost, simplifying your budgeting.

Cons:

• The main drawback is that you never own the goods.
• Mileage restrictions apply, and if exceeded, you could face expensive excess mileage charges.
• You are responsible for keeping the goods in good condition, and you may incur damage charges upon return if there’s excessive wear and tear.
• In the long term, leasing can potentially be the most expensive way to have goods
  because you continually return them and start a new agreement, never building equity.

Who is Best Suited to Leasing?

Leasing is particularly well suited for certain types of customers. It’s ideal for individuals who want to drive new goods every 2-4 years, such as a new car, as it allows for regular upgrades without the burden of selling your previous item. It also appeals to those who want to keep monthly payments as low as possible, as leasing often offers the most affordable monthly outgoings.

This option is perfect for people who don't want the responsibility of ownership, allowing them to avoid concerns about depreciation and the hassle of selling the goods. It’s best for drivers with predictable mileage needs (for vehicles), as accurately estimating your annual usage is crucial to avoid excess charges. Finally, businesses often find leasing advantageous due to potential tax benefits; however, it’s always wise to consult with a tax professional to understand the specific implications for your company.