Understanding finance leasing in three steps: asset, advance and redemption

Finance leasing can offer a whole variety of benefits. This solution is becoming increasingly prevalent both in the automotive sector, where it is often used instead of traditional forms of financing, but also in relation to plants and equipment. However, some aspects of this product can be unclear to customers. Stefano Bacchiani, Head of Leasing & Rental Sales Excellence, is here to answer some of your most common queries.

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used assets and malfunctions
advance
end of the contract

Is it possible to finance a lease on a used vehicle? And who should I contact if it malfunctions?

In general, leasing is applicable to both new and used goods, but the types of goods, the market context, the possibility of access to facilities are factors that influence choice.

For example, if there are problems with the supply of cars and commercial/industrial vehicles, demand switches towards the used market. This causes the prices of these vehicles to rise, and so a more careful assessment is required in relation to their value and their current condition.

Banca Ifis generally only offers finance leases on used cars that are not more than 4 years old, and on commercial or industrial vehicles that are up to 6 years old. If the customer is looking for a particular arrangement, we can offer financing on a new vehicle, with a solution to suit his needs.

With regard to capital goods: although there is the option of financing for used assets, customers usually prefer to apply it to new goods. This is to take advantage of the various tax benefits that often come when you acquire certain types of machinery, equipment or software.

Leasing is a type of financial instrument that allows you to acquire a certain asset. So if that asset malfunctions in some way, you need to contact the supplier of the machinery/car/industrial vehicle, while always keeping the leasing company (the owner of the asset) informed about any action that is taking place.

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What is the maximum advance in relation to leasing? Can one arrange an advance that is equal to the following instalments?

In the case of a finance lease, the advance is certainly an integral part of the whole transaction. If the asset has a high market value, the customer pays less in terms of an advance, and then a series of monthly instalments, all of equal value to the advance.

It is possible to pay an advance of up to 45% of the initial price of the asset. This will lower the amount of financing required, and so make the instalments more affordable for the customer. We will discuss this with the customer, and agree on an advance to suit his budget and his needs.

If I have a leasing arrangement, who should I contact for redemption at the end of the contract?

If the customer has a finance lease with Banca Ifis, then he should contact the person at the bank who made the arrangement about 30 days before the contract expires. Alternatively, he can call the Bank’s leasing department directly on a toll free number, where he will receive the necessary instructions for completing the redemption procedure.

However, if the customer does not wish to redeem the vehicle, but instead to obtain a newer, higher-performance model, this will provide a chance to conclude the leasing arrangement that is expiring and to request a new one. Finance leasing includes the option of redemption, but this is not mandatory. This type of financial solution is very flexible and can be adapted to the needs of the customer, who may want to obtain ownership of the vehicle, or return it and lease another higher-performance model.

For the Leasing contractual conditions, consult the information sheet available in the Transparency section of the website www.bancaiﬁs.it.