Secrets That Some Leasing Companies Hide From You
Buying a vehicle on lease often looks like the easiest option when you don’t have enough money upfront. At first glance, vehicle leasing may seem simple, but in reality, there are hidden terms and conditions that many companies do not clearly explain. Today, MotorGuide reveals the secrets that some leasing companies don’t want you to know — so you can make smarter financial decisions when leasing a car.
How Does Vehicle Leasing Work?
When you cannot afford the full cost of a new vehicle, you can lease it. The financial institution or leasing company provides the balance as a loan, and you must follow their terms and conditions. In return, you make fixed monthly installments until the loan is settled.
Things to Consider Before Leasing
✔ Choose the Right Leasing Company
Always check whether the leasing company or financial institution is registered with the Central Bank of Sri Lanka. If not, you risk working with an unregulated company. A safer option is to obtain leasing facilities directly from a bank.
✔ Get an Affordable Leasing Facility
Remember that the lease amount plus interest must be repaid in monthly installments. Avoid borrowing more than you can realistically afford, as this could lead to repossession of your vehicle.
✔ Provide Accurate Documents
Leasing companies will ask for documents such as your NIC, proof of income, and the vehicle registration certificate. Make sure all documents are genuine and accurate to avoid future disputes.
Hidden Secrets of Leasing Companies
1. Paying Even After the Vehicle Is Seized
If you fail to make payments, the company can seize your vehicle and sell it. But here’s the hidden fact: if the sale does not cover the full outstanding loan, some companies may still pursue legal action to recover the remaining balance. However, under the Lease Finance Act and Consumer Credit Act, they are not always entitled to do so. Knowing this can help you defend yourself in such cases.
2. Repossession Even When You Pay on Time
You might assume that paying installments on time protects you. In reality, the leasing company has the right to repossess your vehicle if they suspect you may fail future payments, or if you misuse the vehicle and damage its condition. When you sign the leasing agreement, you unknowingly consent to these clauses.
Tip: Always ask the company to explain every clause in your contract. They are legally required to do so.
3. Higher Interest Than Expected
Another hidden practice is interest calculation. Some companies apply interest not only on the balance you owe but also on part of the down payment you already made. This means you end up paying interest on money you never actually received. The “extra” portion is often adjusted in the final installment, but overall, you pay far more than expected.
Leasing a vehicle is not as simple as it appears. Many leasing companies in Sri Lanka include clauses that favor them, not you. To avoid being deceived:
- Read the leasing agreement carefully before signing
- Ask for clarifications on hidden fees, repossession terms, and interest calculations
- Choose a bank or well-regulated financial institution whenever possible
If you plan to lease a vehicle, be cautious and remember the secrets MotorGuide revealed today. A little awareness can save you from hidden costs and unexpected problems.
