Car Leasing in Vilnius, Latvia

History of occurrence of leasing

Leasing appeared before our era. The objects of leasing relations were equipment, livestock, land, vineyards, etc. Gradually began to practice boat’s rent. Even in those days when the person takes the property on the long-term lease the lessees demanded accepting the obligations of care for subject of leasing on the lessor.

Aristotle wrote: “Wealth is in use, rather than ownership “, which confirm the existence of long-term lease BC.

Traces of leasing lead to such sources as: the Law of Hammurabi, Roman law, even in the parable of the “Gospel of Matthew” in the “New Testament” is mentioned on the owner of land, who rented out his vineyard and wine press.

Subject of leasing, in ancient times could speak, entirely different objects. From the history you can see that in the rent even military equipment.

Important role in the development of leasing relations played a formation of industrial business in the mid-19th century, with the appearance of railroads in the USA and in the UK, used leasing of railcars.  After the telephone company ‘Bell’ decided not to sell and rent their phones (1887), this was the year of appears the term “leasing”, which gradually included in the international use

Car leasing has started to develop in 1918. Then in 1930, the company “Ford” has resorted to renting their cars, in order to increase sales of its products. But the main achievement in the automotive leasing considered Frank Zolli, who is one of the first propose a long-term car rental.

Already in the early 50s leasing takes a massive scale. For Rent started to take: equipment, ships, aircraft, machinery, etc.

Concept, object and types of leasing:

Leasing – a variety of financial services, is the lending company’s fixed assets or to purchase a very expensive products for individuals.

The lessor is obliged to transfer the property requested by lessee for temporary use, possession. In this case the lessee himself may indicate a specific seller, but the contract may provide reverse. Basically leasing used for business purposes, but eventually leasing for individuals as well become very relevant.

Subject of leasing can be absolutely any unimproved things (technical equipment, automobiles, buildings, businesses, etc.). Subject of finance lease is owned by lessor, but there are times in a financial lease agreement when the subject of can be found on balance of the lessee.

Financial and operational leasing.

Financial leasing is intended to cover the full cost amortization of leasing object.

With this type of lease, the lessee shall pay the entire cost of the acquired property. In the period of completion of the contract residual value of the subject of the contract, usually zero. After termination of the contract, the object of the contract can become the property of the lessee. This is a unique way to attract investment.

As for the operating lease, the lessor in this case does not cover all his expenses for the duration of a lease agreement. The object of such a contract can serve items that are already owned by the lessor . Objects at the completion of the contract can be re- leased to surrender or to be repurchased by the lessee at the residual value. In this type of lease the responsibility for the condition of the leased object lies on the lessor . Leasing rate for operational leasing exceeds the rate of financial leasing.