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The Choice of buying or leasing…

Just as one would prefer to live in a rented house instead of purchasing one, a number of individuals are now opting for rented cars instead of purchasing a new one.Put aside the vetting process that banks place on clients seeking car loan, the subsequent costs in maintenance and taxes are some of the reasons many organisations now look into leasing.For some, leasing is a decision influenced by credit scores typically, low credit scores get you more money with a lease but it’s a lifestyle choice as well: if you prefer driving newer vehicles, and if you do not mind always having a car payment, leasing can be beneficial.“The monthly cost of leasing a car is less as compared to buying a new one, a leasing arrangement could eliminate extra charges in insurance premium, tear and wear, and the auto rescue charges,” says Transport Manager Vincent Okiya of Pwani Fleet Freighters.Firms join in“This fact is now driving non-governmental organisations, parastatals, private companies and expatriates into considering leased vehicles,” he says.Local motor leasing companies like Auto Scope, Auxila motors, and SwedKen agencies among other dealers handles the legal procedure and taxes required during the lease period on behalf of its clients.“We ease the convenience wherever the client is based, this will enable entities focus on the resources of their core business,” Auto Scope for instance has partnered with various dealers to provide different types of vehicles to suit preferred terrain.“This is to offer a solution to various firms that may find it prudent to limit their energy resources on cost of motor vehicle maintenance and purchase,” he says.The leasing companies have structured a formula to provide a free motor vehicle maintenance and driver services for a contracted period of time not less than one year, this also includes branding at the preference of a client.”“When you purchase a car, you typically make a down payment, and either pay fees and taxes in cash or roll them into your loan, you pay interest at a rate determined by your lender, and your monthly payments begin a month after your contract is signed. The loan payments go toward the vehicle’s entire cost.”Options availableWhen you lease a car, though, your payments are only going toward the part of the vehicle’s cost that you will use in the time you have it. 
In addition, you have the option of not making a down payment, and, in most states you pay sales tax only on your monthly payments, which include a money factor that is not unlike the interest rate on a loan. 
But besides, there could be additional fees, or even a security deposit, and your first payment is made when your sign your contract.
As an example, if you purchase a car that costs Sh700, 000 you pay all of it, plus taxes, fees, and finance charges, but because cars begin to depreciate the moment they leave the lot, two or three years later, that car may only be worth half of the purchase price if you were to resell it.
Auto Scope Limited Adminstrator James Mworia adds that if an individual had to lease the same car, it will still depreciate at the same rate, but instead of paying the entire cost, you only pay for the difference like the part used plus finance charges and fees.On the contract, depending on a leasing company, vehicles are fitted with security system, which allows constant remote monitoring from any computer or mobile phone and has an automatic distress signal and remote immobiliser function.“This ability to track, locate and manage assets is critical to a company’s overall performance as it saves time and money,’ he says. “You can monitor field operations and manage the fleet from the office through the Internet or mobile phone,” he says.With GPRS facilitation once installed, it can be controlled on line and re-configured. The report is accessed using web-based software. This enables an individual client to have password control access.
The system gives assorted information like estimated time of arrival, delivery date and time, finding the last location and event.
“You can verify and optimise the productivity of your employees through the fleet tracking system,” he says.

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