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Leasing Facilities


isurunugawela88

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  • 2 months later...

Most of AL users have recommended a loan over lease or HP. So I’m hunting for the best deal for a loan these days, as I understand when I take a car loan the car will be mortgaged to the bank, its same with leasing and HP. Also I've seen some reputed banks have lease/HP rates lower than their car loan rates even with the added VAT. I’m confused whether to take a loan or a lease/HP. It would be great if someone can elaborate the advantages of a car loan over a lease/HP. Thanks in advance.

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Most of AL users have recommended a loan over lease or HP. So I’m hunting for the best deal for a loan these days, as I understand when I take a car loan the car will be mortgaged to the bank, its same with leasing and HP. Also I've seen some reputed banks have lease/HP rates lower than their car loan rates even with the added VAT. I’m confused whether to take a loan or a lease/HP. It would be great if someone can elaborate the advantages of a car loan over a lease/HP. Thanks in advance.

I'm not sure a loan will be possible if the car is older than 10 years. If not it is the better option as you won't end up paying the VAT on top of the installment for a loan. Lease is better for unregistered cars if the seller is giving a VAT invoice. Correct me if I'm wrong.

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yeah..lease will be a better option for an unregistered car provided the seller is giving a VAT invoice..the HP is recommended/granted for registered vehicles..but again most banks granting HP are keen on their margins...basically they comfortably grant 60% of the forced sale value (approx 90% of the market value) of a 3-5 year old Japanese vehicle(indian /korean vehicles derives low value)..the percentage will be reduced with the age of the vehicle..ELSE you have to go with finance/leasing companies where you can even get 90-100% of the vehicle value as lease/HP but with higher interest rates..

And for the loan similar to HP the banks are keen on their margins they do not give loan for the total value of the vehicle (if it is registered) unless you are sound in repayment/creditworthiness..

it all because

the vehicle loans are governed by Mortgage act.. in a worst case scenario the recovery process is cumbersome and time consuming..(you just cant seize the vehicle)..but for leases since the banks/Finance co have their absolute ownership over the vehicle they can quickly terminate the contract and seize the asset (lesser risk)..

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go for hire purchase AFAIK..now banks are giving HPs..considering you are looking a vehicle which is 7 years old..you might be able to go for a HP facility with a repayment period of 3 years..roughly for 60% of the value of the vehicle...

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If you take a personal loan from a bank you might not need to mortgage the vehicle to the bank since the loan is given based on the salaried income. Therefore if you want to sell or change the vehicle later it will be easier. You might also be able to take more than 60% of vehicle value (even 100%) since the bank will not be taking the vehicle as security but the bank might ask to send your salary to them and request a undertaking from your employer to continue sending the salary to them.

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go for a personal loan. commercial was giving at a very decent rate. I have one with NDB right now they are on the high end of the interest rate scale. If you are a professional i think the rate is .5% less at commercial.

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If you are earning a salary, bank will not ask for a security. They will take an undertaking from the employer to get the salary to them to recover the loan instalment.

Check these links to get an idea about the rates

http://www.combank.net/newweb/rates-tariffs/lending-rates

http://web.boc.lk/index.php?route=rates/rates

http://www.peoplesbank.lk/depositrates/mainc2

http://www.sampath.lk/sampath_files/iraFTP/advances.pdf

http://www.nsb.lk/Lending_rates.php

Edited by NILANTHAG
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Get a personal loan from NDB. You can get it at 13.95% (Fixed rate) and a repayment period of upto 7 years. No need of guarantors. Just send your salary to them or setup a standing order with your current bank.

They don't give a sh*t about what you are gonna do with your money, be it a car or a lawn mower. :)

And if you don't mind floating rates, commercial has fantastic rates for personal loans ( <10%)

Edited by NRX
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