You wish to lease a company car. In this case, you have the choice between operational leasing and financial leasing. Note that these two options are only available to companies, self-employed individuals, or holders of liberal professions, never to private individuals. A comparison.
Financial Leasing
In the case of financial leasing, you rent the car for a specified period from the leasing company. The contract does not include operational follow-up – think of insurance, maintenance, possible repairs, and tires. You will therefore need to handle these. At the end of the contract, a purchase option is provided: it gives you the right (but not the obligation) to buy the car at a given residual value. Thus, during the contract period, you are not the owner of the car; you only become the owner when the residual value is paid. In this case, you will need to re-register the car and pay a new registration tax.
It should also be noted that financial leasing is not limited to car financing. In fact, the financial leasing contract is defined as a rental contract for movable or immovable property concluded between a bank and its client, which is accompanied by a purchase option at the end of the monthly repayments, which is not mandatory. For example, a small business might use financial leasing to finance its computers, printer, etc.
Operational Leasing
In the case of operational leasing, you benefit, in addition to renting the car, from a whole range of additional services: interest, taxes, maintenance costs, possible repairs, insurance, depreciation… The leasing company therefore assumes all the management and administration of the car. It is no longer necessary to keep garage invoices and gas station receipts, which facilitates the tax deduction of car expenses.
Operational leasing is therefore an “all-in” formula: fuel, technical assistance, and a replacement car are often included in the contract. Unpleasant surprises, such as unexpected repairs, are generally excluded: you know in advance the exact periodic amounts to be paid. In short: risk and cost control are central.
In terms of operational leasing, you receive a monthly invoice that includes all the services covered by your lease. You are not the owner of the car and cannot become one. At the end of the contract, you must change cars.