The term 'leasing' comes from the English word 'lease' which means 'rent'. In the second half of the 20th century, this concept evolved in the financial model which has its own autonomous meaning today.
The purpose of leasing is reflected in Aristotle's statement: "True wealth does not lie in the ownership of property, but in the right to use it".
Choose a practical and flexible manner of financing though financial leasing, which means that you have the right to use and operate the Leasing Subject for the duration of the agreement. While you are paying for the Leasing Subject in instalments, you generate profit from its use.
During the repayment period, as a Lessee, you have economic rights over the Leasing Subject, while the Lessor remains the legal owner.
With the repayment of the final instalment and transfer of ownership, you become the owner of the Leasing Subject.
Financial leasing is a transaction in which the Lessor transfers the authorisations to hold and use the Leasing Subject for the contracted period to the Lessee, and the Lessee pays the agreed fee in instalments. Leasing is one of the methods of financing and investment in fixed assets for a particular object and it is an alternative to own funds and bank loans.
Characteristics of leasing
Financing is always approved for a particular object
The procurement of the asset is executed by the Lessor, and not the Lessee
Lessor is the owner of the asset during the entire term of the Leasing Agreement
The Leasing Subject is at the same time the collateral
The Leasing subject must be insured by a comprehensive vehicle insurance/property insurance policy for the term of the agreement
A legal entity seated in the Republic of Serbia and licensed by the NBS to execute financial leasing operations.
Any legal entity, entrepreneur, farmer (as the holder or member of a family farm within the meaning of the law regulating agriculture and rural development) or an individual who enters into a Leasing Agreement with the Lessor and who takes over the Leasing Subject for use from the Lessor for the agreed time period and agreed fee.
3. Supplier of the Leasing Subject
A legal entity registered for the production of, trade in and/or servicing of the Leasing Subject which sells/invoices the Leasing Subject to the Lessor.
4. Leasing Subject
A Leasing Subject is a movable non-consumable object (vehicle, machine, equipment, etc.) which the Lessee has chosen by himself at the Supplier.
5. Leasing instalment
The fee the Lessee pays to the Lessor for the use of the Leasing Subject under the terms and conditions stated in the Leasing Agreement.
6. Leasing register
A unique centralised electronic data base in which the data on the Financial Leasing Agreement are entered. It contains all relevant information on the Lessee, Lessor and the Leasing Subject.
7. Down payment
The amount of money paid by the Lessee when entering into a Financial Leasing Agreement. It decreases the principal for the calculation of leasing instalments and is not returned to the Lessee in the event of the Leasing Agreement termination.
8. Leasing term
A time period for which the Leasing Agreement has been concluded.
9. Security instruments
Instruments by which the leasing company secures the collection of its claims under the Leasing Agreement. These can be: bill of exchange, direct debit order, pledge, mortgage, insurance, etc.
In accordance with the Law on Financial Leasing, there is an obligation to insure where the lessee is obliged to secure the object of leasing from the risks provided for by the contract, unless otherwise provided by the contract.
Frequently Asked Questions
1. What is a nominal and what is an effective interest rate?
A nominal interest rate is the price of financing repayment and the basis for calculation of monthly leasing payments/instalments is executed. An effective rate of leasing payment/instalment is the total price of financing, which apart from interest, includes all other costs related to entering into the Leasing Agreement.
2. What is the Credit Bureau?
The Credit Bureau is the central national register of data on liabilities and regularity of individuals and legal entities in their settlement of liabilities towards banks, lessors and other service providers.
3. What is the debt-to-income ratio of an individual?
The debt-to-income ratio of individuals is defined as the ratio of total monthly credit liabilities and regular net monthly income.
Total monthly credit liabilities are the sum of all loan and credit card liabilities (monthly liability related to total approved credit on a card), activated sureties under loans and liabilities under financial leasing agreements, as well as other liabilities of the person whose debt-to-income ratio is being determined.
4. Who chooses the Leasing Subject and the supplier?
The Leasing Subject and the supplier are chosen by the Lessee. The Lessee receives a pro forma invoice from the supplier of the Leasing Subject which, apart from value of the Leasing Subject, also contains the data on the Leasing Subject (type, brand, year of production and technical characteristics).
5. What is Leasing Register Registration Fee?
According to Article 49 of the Law on Financial Leasing, there is an obligation to enter all leasing agreements in the Leasing Register with the Business Register Agency. A registration fee is payable by the client along with the down payment.
6. What is intercalary interest?
A leasing fee/instalment is always due on the first business day in a month and payable within 5 business days. For the period between the payment of the amount of gross purchase value of the Leasing Subject to the Supplier until the last day of the current month, the intercalary interest is calculated. The intercalary interest is the cost invoiced only once during the term of the agreement.
7. Which collateral is required by the leasing company?
Insurance of the Leasing Subject - The Leasing Subject should be insured by an adequate comprehensive vehicle/property insurance policy during the term of the Financial Leasing Agreement.
Security instruments – A security instrument is defined for each agreement individually, based on the client's financial standing and specificities of the transaction. Basic security instruments include bills of exchange of the company/personal promissory notes of the Lessee.
The leasing company can require additional security instruments depending on the financial standing of the Lessee and specificities of the transaction (e.g. mortgage, pledge, etc.).
8. Is comprehensive vehicle/property insurance mandatory during the whole term of the agreement?
Comprehensive vehicle/property insurance is mandatory during the whole term of the Financial Leasing Agreement.
9. Who registers a vehicle financed through leasing?
The vehicle is registered by the Lessee at his seat or place of residence, based on an authorisation of the Lessor. The vehicle can also be registered at the seat of the Lessor.
In cooperation with the vehicle registration agents, we can offer you favourable and fast vehicle registration service.
10. Is the Lessee registered in the vehicle registration certificate as the user?
The Lessee is entered in the vehicle registration certificate as the user of the vehicle, while S-Leasing doo is entered as the owner of the vehicle.
11. Who may be authorised to drive?
In case of individuals, the authorisation to drive a vehicle is issued to the Lessee. Additional authorisations can be approved to the immediate family members.
For legal entities, S-Leasing issues an authorisation for driving to the company, while an employee of the company is issued an authorisation to drive in his/her name by the company in which he/she works.
12. Can a vehicle financed through leasing be driven abroad?
A vehicle financed through leasing can be driven abroad with a yellow card (authorisation to drive another person's vehicle abroad - DTV). The Lessee can apply for the yellow card at the AMSS with an authorisation of the Lessor, a valid passport and a vehicle registration certificate. The yellow card issued by AMSS should be brought to S-Leasing for certification.
Insurance green card is the evidence that you have concluded TPL insurance with a domestic insurance company for the vehicle. For Macedonia and Bosnia and Herzegovina, as the countries through which our users drive most frequently, it is necessary to take out a green card in the insurance company from which you obtained the mandatory insurance policy, as well as for Russia, Belarus, Ukraine, Moldova, Turkey, Israel, Iran, Albania, Tunisia and Morocco.
The green card is not necessary for entering the 28 European Union members, or for Switzerland, Norway, Island, Andorra and Montenegro.
13. Is a disposal of vehicles prohibited?
The Lessee is prohibited from disposing of the vehicle until the full payment under the Financial Leasing Agreement.
14. What is necessary for registration renewal?
The Lessee is issued an authorisation for vehicle registration, with which the registration is renewed after the settlement of the following obligations:
- All contractual liabilities due by the registration day
- All liabilities related to comprehensive vehicle insurance due to the insurance company by the registration day in the event of a long-term insurance agreement should be settled
- Comprehensive vehicle insurance should be settled and extended in the event of a one-year insurance agreement and the Lessor's evidence (policy) to that effect should be provided
15. What to do in the event of a loss of vehicle registration certificate?
In the event of a loss of vehicle registration certificate, the leasing company issues an authorisation for the issuance of a duplicate certificate with which the client goes to the police. The client is obliged to deliver a copy of the new vehicle registration certificate.
16. What to do in the event of a loss of registration plates?
After the delivery of the certificate of the police that the loss of the registration plates has been reported, the leasing company issues an authorisation to obtain new plates. The client is obliged to deliver a copy of the new vehicle registration certificate.
17. What to do in the event of partial loss?
In the event of partial loss, the client is referred to the insurance company with which he/she is insured to act according to their instructions - bring the vehicle to the insurance company where the loss is photographed, and the client is then referred to an authorised service garage for repair (a consent of the leasing company is required for the payment of the cost of repair to the service garage).
18. What to do in the event of total loss?
In the event of total loss of the Leasing Subject, the client is requested to report the loss to the insurance company with which the subject is insured (by comprehensive vehicle or property insurance) and to act according to their instructions. After the insurance company confirms the total loss of the Leasing Subject, the calculation and payment of damage to the account of the Lessor is executed without repairing the subject. The amount to be paid is determined based on the calculation of the total loss which includes the real value of the subject at the moment of the loss, taking into account depreciation, corrective factors by the insurance company (current state of the subject, mileage, supply/demand, etc.), any debt related to the insurance premium and estimated residual value of the subject.
19. What to do in the event of theft?
In the event of theft of the Leasing Subject, the client is obliged immediately to report the theft to the police, which issues a certificate that the theft of the subject has been reported. After reporting the theft to the police, the client is obliged to report the theft to the insurance company with which the subject is insured (by comprehensive vehicle or property insurance), to deliver to the insurance company the original certificate from the police that the theft has been reported and to act according to their instructions. The Lessee is obliged to inform the Lessor of the theft of the subject as well as to deliver to it the copy of the certificate issued by the police. If the Leasing Subject is not found within 30 days from the theft, the client is obliged to obtain from the police another certificate that the subject has not been found in the previous period and to deliver the original certificate to the insurance company and a copy to the Lessor. After that, the insurance company will calculate and pay the damage to the Lessor's account.