Auto Leasing

Differences between owning an automobile, rent-a-car and auto leasing

Maintenance lease is a transaction in which a leasing company purchases a specified automobile and leases to customers for a specific period at a rental rate. In this scheme, the automobile belongs to the leasing company and you pay the rental fee in order to use the automobile without incurring maintenance, insurance and other costs.

Owning Rent-a-car Auto Leasing
 Purpose  Planned, Long-Term, and ongoing
 use
 Temporary, Short Term and 
  intensive use
 Planned, Long Term, and ongoing
 use for outsourcing benefit
 Leasing term  None  Short-term (hours, days,
 weeks, months, or years)
 Long-term (year; usually longer than
 three years)
  Owner  User   Rent-a-car company  Leasing company
 User  -  Unspecified of users
 (Individuals and corporations)
 
 Specified users
 (primarily corporations)
 Payments One lump sum payment  Relatively high

 Relatively low

 Mid-term
 cancellation
 None   available when the
 automobile is returned
 Can be canceled with little costs for operating lease
 Maintenance  Conducted by user  Conducted by rent-a-car
 company
 According to the term of contract,
 the auto leasing company bears the  maintenance costs
 Particular
 specifications
 (e.g., color and
 others)
 Possible  Generally impossible  Possible
 Automobile cost  Paid at purchase  Paid through rental fees  Paid through lease payment
 Tax & Insurance  Occasional expenditure  Included in rental fees  Included in monthly lease payments
 Accounting
 treatment
 On balance  Off balance (The payment is regarded as expenses)  Off balance (The payment is regarded as expenses) 
 Automobile disposal  User no replacement  Everything is handled by
 rent-a-car company when
 automobile is no longer in
 service
 Everything is handled by auto
 leasing company when the
 automobile is returned

Advantages of Leasing:

Effective Administration (for auto leasing with maintenance)

  1. Labor-saving on administrative work
    If you use auto lease service, you save time spent on troublesome administration, i.e., negotiating with the dealers, selecting insurance policies payments of taxes and insurance premiums, arranging the automobiles for regular maintenance.
  2. Better Quality Maintenance
    Regular maintenance services assure that you can use the automobile in its best condition.
  3. Accidents
    There is prompt and competent action in case of an accident by a casualty insurance company arranged through us.
  4. Cost Visibility
    All costs and expenses relating to the automobile, except for the fuel charge, is included in the lease rent and hence all automobile related costs become more visible.

Financial Flexibility

  1. Lower Financial Burden
    You only need to pay fixed monthly rent. You do not need to pay the purchase price at one time, allowing you to avoid fixing your funds.
  2. Increase funding Ability
    If you finance your automobiles through leasing, you do not need to use your credit facilities from banks. Also, banks often require collateral against your borrowing but it is not required collateral arrangement in case of leasing.

Cost Saving (For Auto Lease)

  1. Volume Discount
    We can lower the lease rent as ORIX save purchase cost by volume discounts.
  2. Competitive Auction
    We achieve a higher sales price on used autos by selling through the ORIX organized auction system, and the benefit is passed along to our customers.

Tax Merit

  • Depreciation Expenses for Auto Lease
    For passenger automobiles, the depreciation period is 5 years and the maximum depreciation amount is capped THB 1 million for the entire period.

    If you lease, you can expense up to THB 36,000 per month (VAT Incl.) or more than THB 2 million over 5 years.