...Vehicle The great debate to lease or buy a car? Which one of the two options is the smarter or he better choice? The answer to this question is both and neither are the best options. Confusing one may think so, however, the best way to get to the answer is to ask yourself what is important to you. Every person is different with different values and priorities that determine for them whether leasing or buying is the answer. There are people who desire to drive a new vehicle every few years with little or no maintenance costs. Some people have a strong desire to own the vehicle, as opposed to lower upfront costs with no ownership. One of the two of the biggest temptations for many people to lease verses buying are that the monthly costs to lease are cheaper than the monthly payments to buy a car. The other is that they are able to have a new car every 2-3 years, as opposed to the people who purchase. People who purchase generally hold on to the car for an additional 2 years after the last car payment. Let’s review the pros and cons of leasing. The advantages of leasing are it offers lower monthly payment and the ability to drive a new car with all the new bells and whistles every 2-3 years (ehow). There is a tax benefit of paying lower taxes since the individual is paying the taxes on the monthly payments verses the full value of the car. From the two examples so far it appears that leasing is a great situation, and everyone should lease; once again maybe we will look...
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...LEASE OR FINANCE?? In today’s competitive economy, a vehicle is no longer considered a luxury anymore, but rather a necessity. There are not very many cities in the U.S. where you can live without car. I live in Orlando, Florida and dependable transportation is a mandatory expense. If you want to buy a new car, the cheapest way to buy a car is to pay cash for it. By paying cash you will avoid any finance charges. However, there are not very many people have thirty to fifty thousand dollars to spend on the vehicle. Lease or finance are two main options if you don’t have a lot of cash available to spend on the car. I have chosen the BMW and Infinity dealership to do my analysis. I picked two similar cars form the both dealerships: X5 xDrive35i Sport Activity from BMW and Infiniti FX50 from Infinity dealership. After analyzing financing and leasing options, there is no clear answer on whether to finance or lease a vehicle. It basically all depends on how much money you have, how many miles you drive, how long you want to keep your car for and etc. BMW offers 0.9% APR for 24 month and 3.9% for 25-60 month with $0 down payment to finance the X5 xDrive35i Sport Activity. The price of the vehicle is $57,700. It’s approximately $1,700 per month for 36 months. The lease option is $699 per month for 36 months with $3,000 down payment, $725 acquisition fee, and $4,424 cash is due at signing. The total lease payment is $25,164. At the end of the lease, lessee will be liable for disposition...
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...Company Car Policy 1. Objective The new Company Car Policy has been formulated in order to introduce an employee friendly and easy to administer car scheme in the company with effect from -----------. With the introduction of this scheme all previous car schemes stand withdrawn. 2. Scope Employees in Grade M1 and above are entitled to participate in this scheme. These employees have been assigned Management Allowance / Car Kitty as part of their remuneration package. Their Management Allowance / Annual Car Kitty amount is given in the table included herein below. |(A) |(B) |(C) |(D) |(E) | | | | | | | |Grade |Car Kitty Amt. (p.a.)* |Mgmt. Allow. (p.m.) |Addnl. Car Kitty (p.a.)* |Max. Car Kitty Amt. (p.a.)* | | | | | | | | |Rs. |Rs. |Rs. |Rs. | |M5 |240,000 |20,000 |60,000 |300,000 | |M4 |195,000 |16,250 |45,000 |240,000 ...
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...Amy is trying to decide if she should buy a car or lease the same car. The car salesman has told her that she can buy the car for $27,000. She will need a down payment of $2,700. The remainder will be financed with a loan. It will cost her 4.5% compounded semi-annually. She will make 60 monthly payments at the end of each month. If she leases the car, Amy will not put any money down. However, she will be required to pay $12,500 at the end of the lease. Amy will make 60 monthly lease payments of $250. The lease payments will be made at the beginning of each month. Assume the appropriate interest rate is 7.3% compounded semi-annually. a) Draw two detailed timelines and label all components displaying the details of leasing and buying the car. b) What are the (1) effective annual rates (EAR) and the (2) effective periodic rates (EPR) of the (i) bank loan rate and (ii) the lease rate? c) What is the present value of the car if Amy buys the car as opposed to leasing? What is the present value if Amy leases the car as opposed to buying? d) If Amy had the option to make 48 monthly payments to buy or lease the car, what would be the new monthly loan payments and the monthly lease payments? e) Using the information from part c) and d), summarize if Amy should buy or lease the car under the 48 month plan or the 60 month plan...
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...Hello, A car purchase of lease is one that will be a depreciating cost no matter the choice. Buying a car is great but lets take a good look at the misconception and mistakes of buying versus leasing. When you buy a car one usually finances the contract for the car for at least sixty months. Yes I am buying the car but I must maintain the car with general maintenance ( which is not always included in the initial price of the car ). Then it usually takes at least forty eight months to gain equity for the depreciating asset. This is a rule of thumb used by the car dealers and the lenders. This is why using zero down payments always puts the buyer in a negative equity situation for the duration of a long period of time. One would ask what is the big deal? The big deal is that you are stuck with the car in the negative equity situation and can not trade or attempt to trade because of the negative equity situation. You can trade but once again the wallet will suffer as one will need a substantial down payment. There is also variables to consider of the depreciation of the car as the miles put on it and the overall shape of the car when trading. Leasing is a viable option for few as the credit rating for the consumer to lease must be outstanding and usually have a score of 750 as a rule. The irony of the market is that only eight percent according to the National Automobile Association qualify. You do not take the risk of depreciation and the bank is the owner and takes all the...
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...a truck or car you gain full ownership and you can keep it as long as you want to keep the vehicle. When You lease a truck or car, you don’t gain full ownership of the car and have to return the truck or car unless you decide to buy it. Next thing to look at is the Up-Front Costs. With buying a new truck or car, the total cash payment includes the down payment, taxes, registration, and other fees. Which makes buying a new truck or car really expensive. With leasing a new car or truck, the total payment includes the first month payment, a refundable security deposit, a down payment, taxes, registration and other fees. The following is your monthly payment. When buying a new truck or truck, loan payments are usually higher...
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...people want to own their car or truck for a decade. Others want to drive their vehicle tens of thousands of miles a year. but, there are a lot of people who are intimidated by leasing as they think it’s too complicated. The reality is different. When leasing a vehicle, you can save money, get what you want and have an easier process. Here are a few reasons why you should consider leasing your next dodge. If you want to have the newest Dodge models, you can easily do so if you lease. Think about it, if you have a two or three year lease, you can get the latest and most up-to-date vehicles. Whether you are a daily commuter or someone who wants an off-road vehicle, you can lease your next dodge. Then, in a couple of years, you can get another vehicle and enjoy the latest and greatest offerings from Dodge....
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...leased assets make transactions seem much less stressful for the lessee. Most companies prefer to lease rather own simply because leasing is less costly than financing. Startup companies that try to get into business would rather lease in order to claim tax benefits that they otherwise would lose if they did not lease. It is a win-win situation for both the lessee and the lessor. When companies get tax benefits they then can pass some of those benefits to the lessor by charging less for the asset. The other view is the tax advantages that come with leasing. For example, a dealership can lease a car and while the car is being leased, they can depreciate the car or asset so that for tax purposes it would be in a lower bracket. In what situations do you think leased assets should be reported as capital? Leased assets should be capitalized when the leases are similar to installment purchases. If a company capitalizes its installment purchases then it should capitalize its leases that have similar characteristics. The FASB agrees that the capitalization approach should be used when the lease is similar to an installment purchase (Kieso, Weygandt, and Warfield, 2007). Leases should be capitalized when a lease transfers all of the benefits and risks of property ownership, if the lease if non-cancelable. If a lease does not transfer all the benefits and risks of ownership are operating leases. Select an asset that does not meet the GAAP requirements for capitalization on a technical basis...
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...MITSUBISHI MOTORS CORPORATION : Announces Fiscal 2013 First Quarter Operating Results 07/30/2013 | 03:14am US/Eastern Recommend: 0 Tokyo, July 30, 2013 - Mitsubishi Motors Corporation (MMC) today announced its sales and financial results for the first quarter of the 2013 fiscal year (FY) ending March 31, 2014. 1. Performance overview MMC posted a consolidated net sales of 409.4 billion yen for the first quarter of fiscal year 2013 (April 1, 2013 through June 30, 2013), a 2% or 9.9 billion yen decrease over the first quarter of fiscal 2012, showing a decrease in wholesale volume. MMC posted an operating income of 16.0 billion yen, a 7% or 1.1 billion yen increase over the same period last fiscal year. The increase was due mainly to favorable exchange rates as well as reductions in material and other costs which together overcame such negative factors as decreases in wholesale volume and increases in sales expenses including advertising costs. Along with the increased non-operating income from factors including foreign exchange gains MMC posted an ordinary income of 22.3 billion yen, a 57% or 8.1 billion yen increase year-on-year. Net income for the term amounted to 16.4 billion yen, an 18% or 3.6 billion yen decrease year-on-year without the benefit of a 11.4 billion yen in extraordinary income from the sale of stock in affiliates like what was recorded in the first quarter of last fiscal year. 2. Sales volume (Retail) Global retail sales volume for the first quarter...
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...work ……………………………………………………… 16 Types of Auto Finance ………………………………………………………………. 19 Drawbacks of Auto finance ………………………………………………………… 20 Ijarah car financing ………………………………………………………………………. 22 Auto finance by commercial banks in Pakistan …………………………….. 25 Difference between ijara and conventional Auto Finance …………….. 33 Issuue of takaful…………………………………………………………………………… 37 Conclusion …………………………………………………………………………………… 39 INTRODUCTION: The subject of car finance comprises the different financial products which allows someone to acquire a car with any arrangement other than a single lump payment. The provision of car finance by a third party supplier allows the acquirer to provide for and raise the funds to compensate the initial owner, either a dealer or manufacturer. For Business sector finance: Car finance is required by both private individuals and businesses. All types of finance products are available to either sector, however the market share by finance type for each sector differs, partly because business contract hire can provide tax and cashflow benefits to businesses. Personal Car Finance: It is a complete subsector of personal finance, with numerous different products available. These include a straightforward car loan, hire purchase, personal contract hire (car leasing) and Personal Contract Purchase. Therefore car finance includes but is not limited...
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...one is in the process of purchasing a car there are several factors that must be considered before doing so. These factors will be discussed throughout this paper. When one decides what kind of car and how much one can afford one should then decide if leasing or buying would be better for him or her. There are several options that can be considered in making this decision. The auto calculator will help in making this decision. One will put all of the information about the vehicle in the calculator to determine which would be best for him or her at this time. When determining if leasing a vehicle would be best, one would need the information about the cost of the lease, how long the lease if for, and the terms of the lease. One will need to negotiate the terms of the lease to make it better for him or her. After he or she has come up with those figures one should then consider the options of buying a car. To determine if buying a car is best he or she should consider the buying price, discuss the terms of the contract, and decide how the car would be financed and how long it would be financed for. After all of this information has been put into the auto calculator one should then be able to determine which option would be best for him or her. The auto calculator make recommendations about which option would save the most money over the time period allotted. I have always thought that buying was the best option for purchasing a car, but that is not always what is best...
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...BF 1203 TRANSACTION IN ISLAMIC BANKING & FINANCE FACULTY OF BUSINESS AND MANAGEMENT SCIENCES TOPIC: IJARAH Done by: Muhammad Hibatul Hakimi b Haji Suhaili (10B0911) Contents Introduction 1 Basis of Ijarah 2 Essential elements of ijarah contract 2 Modus Operandi 3 3 Selected Banks 4 Conclusion 6 Bibliography 6 Introduction An Islamic alternative to conventional leasing is ijarah. Ijarah is a derivative of the Arabic words ‘ajr’ and ujrah which means consideration, return, wages, or rent. Generally, Ijarah means to give something on a rental basis or wages.According to muslim scholars such as hanafi, maliki and shafiee. Definitions of ijarah according to Hanafi, it is a contract which enables possession of a particular intended usufruct of the leased asset for a consideration. Definitions of ijarah according to shafiee, it is a contract which relates to permissible usufruct liable to utilization and accessibility for a particular recompense Definitions of ijarah according to Hambali, it is a contract for a particular permissible usufruct which is taken gradually for a particular period and a particular consideration. The practice of Ijarah takes place in a contract between two parties which is the lessor and lessee where the lessee gets the benefits of a specific service or specific asset owned by the lessor on specified consideration or rent. In al-ijarah services, the lessee is called musta’jir, the lessor is called ‘ajir and the wage or...
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...CASE STUDY: NORMAN CORPORATION Case 8-1: Question 1 1. Female employees sued the company for $250,000. Large number of similar suits had been filed in other companies but results are varied. Norman outside counsel thought the company probably would win the suit but pointed out that decisions thus were divided and it was difficult to forecast the outcome. No provision had been made in financial statements. Answer: The transaction should be recognized based on the following points: i. ii. Conservatism concept stated that expenses should be recognized as soon as they are reasonably possible to occur. According to loss contingency, a liability is recognized when information available indicates that it is probable for a liability to occur and when the amount of loss can be reasonably estimated. Therefore, Norman should provide a provision for loss and recorded the transaction as a liability and an expense. The journal entries would be as follow: Dr. Cr. Lawsuit Loss Lawsuit Liability $250,000 $250,000 Lawsuit Loss will be recorded in Income Statement under Non-operating Expenses while Lawsuit Liability will be recorded in Balance Sheet under Current Liabilities (as the trial will be held on 2011). 2. Second lawsuit: Customer was injured by one of the company’s products. Customer asked for $500,000 damage. After discussion with customer’s attorney, Norman’s attorney believed that the suit could be settled for $50,000 (no guarantee). If the suit went to...
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...Leasing vs. Financing – What’s best for you? You’re ready to buy a new car. You’ve got the make and model picked out, you’ve taken a test drive and now it’s down to the financial details. Should you lease or finance? Ask yourself the following five questions to help make the decision that’s right for you. 1. How much do you plan to drive your new vehicle? Leasing can make good sense, whether you’re planning to commute to work in your car every day, or to split your commuting between driving and public transit. That’s because a typical lease agreement offers programs for low, high and average (24,000) kilometre/year drivers. Many dealerships can tailor your lease agreement to your specific needs via the purchase of more mileage leeway up front or by allowing payment reduction in exchange for fewer included kilometres within your lease agreement. 2. Is it important to you to own your car? If you want to make alterations or customizations to your new vehicle, or if you plan to keep your vehicle for longer than 5 years, financing may be a better option for you. Keep in mind that leasing a vehicle is really about time and usage – both of which are unique to your circumstances – while financing for ownership is about a plan to build some equity over a longer time horizon. Whichever option you choose, it is important to select a vehicle that will retain its value over time. 3. What is a manageable monthly payment for you? Leasing payments may be smaller than financing...
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...Leasing vs. Financing – What’s best for you? You’re ready to buy a new car. You’ve got the make and model picked out, you’ve taken a test drive and now it’s down to the financial details. Should you lease or finance? Ask yourself the following five questions to help make the decision that’s right for you. 1. How much do you plan to drive your new vehicle? Leasing can make good sense, whether you’re planning to commute to work in your car every day, or to split your commuting between driving and public transit. That’s because a typical lease agreement offers programs for low, high and average (24,000) kilometre/year drivers. Many dealerships can tailor your lease agreement to your specific needs via the purchase of more mileage leeway up front or by allowing payment reduction in exchange for fewer included kilometres within your lease agreement. 2. Is it important to you to own your car? If you want to make alterations or customizations to your new vehicle, or if you plan to keep your vehicle for longer than 5 years, financing may be a better option for you. Keep in mind that leasing a vehicle is really about time and usage – both of which are unique to your circumstances – while financing for ownership is about a plan to build some equity over a longer time horizon. Whichever option you choose, it is important to select a vehicle that will retain its value over time. 3. What is a manageable monthly payment for you? Leasing payments may be smaller than financing...
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