Consumer leasing and online loans

June 26, 2017 Leasing contains elements of loans and rents. Until 2011, only entrepreneurs could use this form of financing. The act on limiting administrative barriers has opened a door for consumer leasing for individuals.

This type of financing on the Vistula is still unknown. According to Credit Checker data, the market share is only 0.1 percent. Traditional forms of financing are popular with customers. Recently, car loans from the non-banking sector are in the lead.

Leasing popular among entrepreneurs

Leasing popular among entrepreneurs

Non-bank loans for entrepreneurs are a new proposal on the market. Leasing is an older form of financing – in addition, quite specific. It combines elements of loans and leases. This type of financial support is extremely popular among entrepreneurs. When choosing a cash loan or leasing, customers sometimes choose the second option. It is estimated that in the first quarter of 2017, the Polish leasing industry-financed investments worth USD 15 billion.

According to the Credit Checker report, the most frequently leased items are passenger cars and vans (up to 3.5 tons). In the first three months of 2017, the value of financed items in this area amounted to USD 6.7 billion. The heavy industry came second with a total investment of USD 4.2 billion. The podium closes the equipment (machines, IT devices) – USD 3.9 billion.

It is worth noting that due to the positive sentiment in the global financial markets and high economic growth, the Polish leasing segment is experiencing a real boom. Compared to 2016, the value of the industry increased by 12.7%.

Leasing not only for companies

Leasing not only for companies

Most of us are aware of who the non-bank sector customer is, but we should be aware that consumer leasing is used by individuals. Therefore, you do not need to run a business to have access to this form of financing. It is worth noting, however, that consumer leasing is not very popular in Poland.

This state of affairs was largely influenced by complicated tax regulations, which did not provide for an individual customer to be the lessee. In 2011, the act on limiting administrative barriers was adopted. The adopted regulations paved the way for the creation of a consumer leasing segment.

What is consumer leasing?

What is consumer leasing?

The biggest advantage of leasing is the fact that the consumer does not have to engage large funds in order to purchase and later use the leased item. The transactions concern movable property – cars and vans.

Important – the person using this type of service does not have ownership rights to the leased vehicle. A consumer lease agreement is understood to be a transaction under which the lessor agrees to buy a specific item.

Then the purchased item is transferred to the consumer. In the next step, the person using the lease undertakes to pay their own contribution. The consumer is also required to pay monthly leasing installments. At the end of the contract, the person using the service has the right to purchase a post-lease car.

Consumer leasing popular in Europe, but not in Poland

Consumer leasing in the country on the Vistula is at the crawling stage. According to the data of the Polish Leasing Association, in 2016 763 contracts were signed for a total amount of USD 66 million. Although the market has increased by 78 percent compared to 2015, this share is marginal and amounts to only 0.1 in total.

However, in Europe, according to the loan comparison data, this type of financing is quite popular. In 2015, the number of consumer contracts in the movable leasing segment was 24%. In the United Kingdom, the consumer leasing rate is one of the highest in the Old Continent and amounts to 49 percent.