Consumer Lease

CONSUMER LEASING
Consumer lease is a lease involving an individual lessee, who leases equipment for consumption purpose from a lessor. The lease equipment in this case is for consumption only and not for the purpose of generating further income.

A consumer lease can be accessed by going to a bank, finance company or any individual lessors that offer consumer lease products. An agreement is entered into through the completion of an application form by the lessee, providing certain important information about him and the asset to be leased. The rentals may be deducted at source (directly from the lessee’s salary) or paid through post dated cheques drawn by the lessee.
Various items could be leased under consumer leasing and these are mostly household equipment, which include generators, television sets, washing machine, gas cookers, cars etc.
The concept was borrowed from the advanced countries where the economy thrives on credit. To the larger economy, credit is an avenue for wealth creation and it brings about higher capital utilization as a result of higher purchasing power it gives an individual.

Consumer leasing has thee ability to reduce financial stress and it could be very effective in a country likes ours where a lot of the population are low income earners and are unable to afford those items or equipment that provide comfort. However, with consumer leasing, life can be made easier and more meaningful as acquisition of assets becomes easier.
Employees of labour can improve their efficiency with less worries and stress through consumer leasing. Organizations can employ their scarce cash for more profitable use rather than servicing frivolous loans to employees. Companies involve in consumer leasing are making money and the patronage from the public is increasing daily with the organization also increasing.

Basically two factors are responsible for this. The first is that consumer leasing involves low risk and secondly, it is very profitable due to the fact that many areas through which a lessor can improve his yield abound. However, consumer leasing has it own risks such as when the lessee is unable to meet his rentals due to job insecurity.
Furthermore, lessee sometimes refuses to accept breakdowns simply because he was not involve in the purchase decision. This is because most often that not it is the lessor who sources for the particular equipment and delivers it to the lessee. The lessee may stop paying rentals once the equipment develop a fault and if the lessor has not made adequate arrangement with the supplier or third parties for repairs, then he bears the risk of loss of rental.
Also because most product under consumer leasing are small in size and are movable, a fraudulent lessee can relocate with the assets and stop paying rentals. And some employers of labour often times are reluctant to give guarantee for their employees. However, lessors can mitigate against these risks by carefully selecting lessees with high level of integrity and credibility.

To improve consumer leasing, there is need for refinancing of the independent lessors who do not have the pool of fund that banks get from their depositors. Also banks that are not directly into consumer leasing should help the industry by financing transactions booked by independent lessors. And employers should be willing to serve as guarantors for their employees readily so as to widen the scope of the market.
Apart from all these, there is need for long time funding to enable lessors to give longer tenured facilities. At the moment, the average tenor of consumer lease facility is twelve months, but if an individual decides to furnish his house by leasing all the items he would need this will require a large sum of money which he must be able to afford/pay within twelve months. Such person will need a long term funding and most probably his employer as a guarantor.
The future is bright for the market but our mentality of being reluctant to take credit must be addressed. Also most of the product under consumer leasing are imported, as the government continue to improve the economy and there is an increase the local contents of production, then consumer leasing will add significantly to the development of our economy.

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Download - Our Vendors List

EASI-LEASE-IT is a registered trademark for C & I Leasing’s finance lease Products. A finance lease is the means by which an individual or a corporate organization can acquire and own any assets of choice without having to make full payment at once or go through the rigorous credit process of obtaining a loan.

There are three packages of this product that have been designed to meet our clients’ needs.

1. Easi-Lease-It (Private) (Finance Lease Package for staff).
2. Easi-Lease-It (Corporate) (Finance Lease Package for organization).
3. Easi-Lease-It (C.A.R.S) (Car Acquisition and Replacement Scheme – a special package of passenger cars for staff and organizations).

Which assets can be leased?
They include brand new cars (of various models), generating sets (all sizes), air-conditioners, computers, electrical/electronic equipment, kitchen and laundry equipment, indoor sports equipment, Personal Computers, laptops, DSTV and lots more.

How does it work?
A Lease application form is duly completed by a prospective lessee for the desired package and returned with a passport photograph, photocopy of ID card, most recent pay slips or bank statements and a Proforma Invoice obtained from any of our approved vendors. We then issue an offer letter for the lessee’s acceptance. The lessee makes payment and thereafter the asset(s) requested is (are) delivered right to the doorstep of the lessee. It is that simple!

Any advance payments?
The Lessee is expected to pay a security deposit, which is determined by the chosen tenor of the lease and the asset value. The security deposit is a multiple of the periodic rentals and is payable on acceptance of the offer.

Mode of Rental Payment
Preferably rental payments should be made either by monthly post-dated cheques or salary deductions made by such company in favour of C & I Leasing Plc for each set of payment. The size of the lease will depend on the ability to pay the monthly lease rental. For individuals, the lease tenor ranges from Six (6) to Thirty Six (36) months depending on the value of the lease.

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This applies to staff whose company has been approved by us. For individuals and corporate bodies that are yet to be approved by us, we will require for the underlisted documents before we can extend our finance lease facility to them:

Checklist for finance lease facility
1. Application for facility (stating request and rationale for request)
2. Company and Directors’ profile (please, must be comprehensive stating ownership structure)
3. Statement on Memorandum of Association and Company registration
4. Audited Financial Statement for 2004-2006.
5. Management account and Bank Statement to date.
6. Statement of current liabilities/borrowings if any.
7. Proforma invoice addressed to C& I Leasing Plc.

For further enquiries, please do not hesitate to contact us.
Bukola Obajenihi (Credit Officer)
Maureen Ogbonna (Manager)

See the list of C & I Leasing Plc. Vendors

Lease Vs Buying

WHY LEASE?

Here are some short- and long-term advantages of leasing:

• Lower cost - Leasing conserves capital. Monthly lease payments are less than monthly purchase payments or monthly depreciation plus interest expense.
• Flexibility - Payments can be matched to budgetary levels. Your business conditions - cash flow, equipment needs and tax situation - help define the terms of your lease.
• Convenience - Leasing provides on-the-spot, one-stop financing for a total solution. Hardware, software, maintenance and asset management can be included in the lease.
• It's easy - Leasing typically requires less documentation than bank financing and fewer internal approvals than a capital purchase.
• Ownership - You can own the asset at the end of the lease
• Protection against obsolescence - The lease can be structured to include upgrades and partial or complete equipment swaps either at mid-term or at lease-end.
• Eliminates risk – The Lessor bears the risk through the period of the lease
• Provides for off balance sheet financing - This potentially increases your borrowing capacity while easing the budgeting process and preserving key financial ratios.
• Protects against inflation - Aggressive fixed-rate pricing allows for protection against inflation whereas variable-rate leases let you take advantage of falling interest rates.
• Ability to customize payment schedules
• Lease payments are fixed
• Improved return on assets (ROA)
• Lease rental payments are made from pre-tax rather than after-tax earnings
• Leasing reduces your administrative cost
• Leasing provides 100% Financing

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Leasing versus buying. The answer?
1. Leases and loans are simply two different methods of automobile financing. One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks.
2. It's not possible to simply say that one is always better than the other because it depends on your own particular situation and preferences.
3. You must not only look at the financial comparisons but also at your own personal priorities — what's important to you.
4. Is having a new vehicle every two or three years with no major repair risks more important than long-term cost? Are long term cost savings more important than lower monthly payments? Is ownership more important than low up-front costs and no down payment?
5. So, making the lease or buy decision is not quite cut and dry. There are some things you need to consider first.


Buying and leasing are different
1. When you buy, you pay for the entire cost of a vehicle; regardless of how many miles you drive it. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company. You make your first payment a month after you sign your contract.
2. When you lease, you pay for only a portion of the vehicle's cost, which is the part that you "use up" during the time you're driving it. You pay sales tax only on your monthly payments, and pay a money factor that is similar to the interest rate on a loan. With leases, you may also pay extra fees and possibly a security deposit that you don't pay when you buy. You make your first payment at the time you sign your contract you can also own the asset after the lease by simply paying a purchase option which is determined at the beginning of the lease.


Lease versus buy? Let's simplify the answers:
1. The short-term monthly cost of leasing is always significantly less than the cost of buying.
For the same car, same price, same term, and same down payment, monthly lease payments will always be 30%-60% lower than loan payments. This is still true even when compared to 0% or low-interest loans.
2. The medium-term cost of leasing is about the same as the cost of buying, assuming the buyer sells/trades their vehicle at loan-end.
The overall cost of leasing compared to buying, over the same lease/loan term, is approximately the same, more or less, assuming the buyer sells the vehicle at the end of the loan. Comparisons sometimes show buying to cost a little less than leasing due to fewer fees, lower finance costs, and the assumption that a purchased vehicle will return full market value if it is sold or traded at the end of the loan (often a bad assumption, especially if traded). However, when the benefits of wisely investing monthly lease savings are considered, the net cost of leasing can easily be less than buying.
3. The long-term cost of leasing is always more than the cost of buying, assuming the buyer keeps the vehicle.
If a buyer keeps his car after the loan has been paid off and drives it for many more years, the cost is spread over a longer term. It doesn't take rocket science to figure out that the cost of buying one car and driving it for ten years is less expensive than leasing or buying five different cars over the same period. Therefore, short-term leasing is always more expensive that long-term buying. If long-term financial benefits were the most important objective in acquiring a new car, it would always be best to buy the car and drive it for as long as it survives — or until the cost of maintenance and repairs begins to exceed the cost of replacing it. However, many automotive consumers have other objectives that reduce the importance of long-term cost savings.

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So, which is better, lease or buy?
It depends on what's most important to you. All of us have different lifestyles and priorities in life — and in cars and finances. Car leasing and buying decisions must be made with those lifestyle and priority attributes in mind. What's right for one person can be totally wrong for another.

If you enjoy driving a new car every two or three years, want lower monthly payments, like having a car that has the latest safety features and is always under warranty, don't like trading and selling used cars, drive an average number of miles, properly maintain your cars, and are willing to pay more over the long haul to get these benefits, then you should lease.

If you don't mind higher monthly payments, prefer to build up some trade or sales value, like the idea of ownership, like paying off your loan to be payment-free for a while, don't mind the possible cost of repairs after the warranty has expired, drive more than average miles, prefer to drive your cars for years to spread out the cost, like to customize your cars, and don't like the risk of lease-end costs — then you should buy.