Changed leasing conditions are not favorable for purchasing cars

Before the financial crisis, the number of cars acquired under leasing agreements in our country increased annually at a fairly rapid pace. However, after the global crisis took hold here, car leasing became unprofitable and the volume of car purchases under leasing agreements fell by almost half.

Analysts predict that this will not stop here. According to forecasts, the leasing and short-term investment market in Russia is at a standstill and is expected to decline in the near future. At present, the amount of short-term capital investments in our country is estimated at about $20 billion. However, by the end of 2009 the leasing market is expected to reduce its volume by $5 billion.

Demand for car rentals provided by Moscow's leasing companies has already decreased by as much as twofold. And the number of leasing companies themselves has fallen by almost 20%. The reason for these changes is clear and understandable — the global financial crisis.

The leasing companies that remain on the market have significantly tightened the terms of their policies. Clients are wary of using leasing schemes and making short-term investments, fearing an increase in debt and being left without funds. In addition, in 2009 the State Duma of the Russian Federation made some amendments to the legislation. For example, deputies specified a list of cars that are no longer eligible for accelerated depreciation.

We are talking about changes in taxation that were introduced at the beginning of the year. According to these changes, the procedure for accelerated depreciation on any passenger cars — which are most often acquired by leasing companies for their employees — has been abolished. After these legal changes, purchasing cars under leasing agreements becomes unprofitable, since the lessee can no longer save money on property tax. In addition, experts believe that car prices will remain at the same level — they will not fall, but neither will they rise.

Returning to the tightened requirements for lessees offered by most of the capital’s leasing companies, it should be noted that interest rates on leasing agreements have risen across the board, and the minimum required period of operation for a company eligible to use leasing terms has also been increased.

Today, enterprises that took passenger cars for their employees on leasing terms from companies providing leasing services in the Russian capital duly make payments under the contract and return the cars. From analysts' point of view, however, the phrase "passenger car leasing" will soon be a thing of the past. After all, leasing cars will become completely unprofitable.