What is leasing and what should I know when I buy a car on a lease?

What is leasing 

 and what should I know when I buy a car on a lease?

When I see a nice car I would like to own, but I find it difficult to raise so much money, I can make a lease. Through this contract, I can buy my desired car, even if I do not have the money at the moment. At first glance, it looks very good, but there is interest on leasing, and my purchase is more expensive. That's not all - leasing also hides other important features that I need to consider before I go to it.

 

To get the car I want to lease, I make a lease with a leasing company (bank or other). My lessor must be a licensed company - meet the statutory criteria and obtain a license from the Bulgarian National Bank. The lessor company buys the car, pays the entire price for it, and I, in accordance with the signed contract between us, start to pay the lease payments and get the right to use the car, but it is not yet my own. At the end of the contract period, I can get the opportunity to acquire ownership of the car.

 

The subject of the lease is a property that can be used for many purposes, such as a car, whether it be a light car or a truck. There is no time limit for the lease. A lease agreement is also concluded for movable and immovable property (office buildings, shops, houses, flats, etc.), but the practice of leasing real estate is not so popular.

 

 

 

 Leasing poses risks and it is important to know about its features, which distinguish it from other types of contracts:

 

1. When selling a car to a leasing company for accidental loss or damage to the property, it is for my account as a lessee, even though I am not the owner of the property. In this case, when I have taken a car for leasing, I have to take care of it and any damage to it (such as scratching, damage from road accidents, damage to parts of the vehicle, theft, etc.) is at my expense, if not I have signed a car or I have no guarantee from the manufacturer. All costs such as insurance premiums, taxes, maintenance costs and use of the property are at my expense. My lessor can not oblige me to whom to insure my car. I have the right freely to choose the most advantageous offer for me.

 

2. A lease shall not transfer ownership, but only the right to use the property in that case shall be granted. Property ownership is usually transferred after payment of the last lease payment. Lease payments are subject to interest, which is determined by the lessor, and that represents its profits from the transaction. There are also cases in which the right of ownership may also be transferred at the time of the conclusion of the contract between me and my lessor, but this is not the case under the leasing agreement itself, but happens on the basis of an additional sales contract, i. in such a situation I have to deal with my lessor further.

 

Important! I have to be careful to check if my interest rate is fixed in the contract, because if it does not, it allows the leasing company to raise the interest. If the interest rate changes, the contract should state how often this can happen and under what conditions. Any interest rate change directly reflects my monthly repayments and, hence, the total cost of the loan.

 

3. It is necessary for me as a lessee (in the role of a natural or legal person) to have a permanent address in the Republic of Bulgaria, the lease and all its annexes must be certified by a notary and the contract be entered in the Central Registry of Special Pledges. This will entitle my lessor to a default on my part of the lease payments, that is, if I do not pay, be able to get back the car and file an application with the District Court to initiate a lawsuit against me. Normally, a promissory note is also issued in such cases.

 

4. In order to make a real judgment as to whether I can pay my leasing installments as a client, I fill out a property questionnaire and I am inspected in the credit history of my credit history, a certificate of lack of enforced enforcement cases against me and a bankruptcy certificate if I represent a commercial legal entity.

 

I have the right to cancel the lease within 14 days from the date of signing the contract without due compensation or penalty, having to return the car and pay the relevant interest.