Leasing has become a common technique to acquire an aircraft, since this asset has become expensive and always subject to a variety of laws and regulations. One of its prime advantages is that it helps to defray cost considerably. Leasing aircraft is most common in military aviation. Further, individuals, pilots, commercial aviations, and government agencies utilize leasing options. Both short term and long term aircraft leasing options are available.

Aircraft leasing transactions are categorized into finance leasing and operating leases. Finance lease is required to meet any of these criteria: a lease term greater than 75% of the aircraft?s estimated life, option to purchase the asset for less than fair market value, or ownership of the asset to be transferred to the lessee when lease expires. It is always enhanced by tax benefits and is shown on the balance sheet of the lessee. Generally, it is for a long term period. On the other hand, an operating lease is usually signed for a short term period. Presently, aircraft leasing is mostly on the basis of this type of lease. According to statistics, there are about 12500 commercial aircrafts in the world, among which about 2500 work on operating lease.

It is always preferable to acquire aircraft leasing services from Commercial Aircraft Sales and Leasing ? a collective term given to organizations engaged in marketing airliners from manufacturers such as Boeing and Airbus. A countless number of other providers, such as commercial banks, financial institutions, and hedge funds, are also in the scenario to make available aircraft leasing services. Of which prominent are GE Commercial Aviation Services (GECAS) and International Lease Finance Corporation (ILFC).

As part of full service lease, most render maintenance management including AOG and heavy maintenance functions. Besides, companies like CIT Group Inc. offer leasing as well as financing packages for new and used commercial and corporate aircrafts. Customized aircraft leasing packages that are designed according to the needs of the clients are also available nowadays.

If there is a single concept which has revolutionized the car industry in recent years, it is the idea of leasing a vehicle rather than owning it. Nowhere has this been seen more dramatically than in the business sector where leasing is now the standard for car ownership.

Leasing for boats has been available in Europe for several years, but it is a purchasing option that is little understood by the boating community in general, and particularly in the UK, despite the fact that it can offer significant VAT advantages whether the vessel is used for private or commercial use. The two most popular schemes are those used in Italy and France.

At the time of their introduction, both countries were suffering a decline in yacht manufacturing. In an effort to halt this decline, both governments introduced incentives for yacht owners to buy their vessels under leasing schemes, which provided significant VAT reductions. In addition, the schemes were based on the concept that the larger the vessel then the greater the saving, thus encouraging owners to buy larger boats.

The growth of yacht manufacturing in the Italian market in recent years has been spectacular, with a proportionate increase in leasing which was up 32% in Q1 of 2005, and now represents nearly 6% of all yacht financing.

Before explaining the details of these schemes, it is important to understand some of the concepts behind them, which should help to clarify some of the relevant issues.

Firstly, in simple terms, a lease involves a bank or finance house, buying the asset and then effectively renting it back to the client for an agreed period at an agreed price. This is defined as a transfer of services. At the end of the lease, the client has the option to buy the asset which then becomes a transfer of goods. For VAT purposes a yacht lease is a supply of services and is deemed to take place where the person who makes the supply is established: i.e. French bank in France, Italian bank in Italy etc.

Secondly, they are simple to set up and administer and can be in individual, joint, or company names. Finally, it is important to understand that there can be two VAT elements, namely the VAT on the purchase price and the VAT on the leasing repayments.

If we take the Italian scheme as an example, the Italian law states that VAT has to be applied to leasing repayments, only in relation to the time spent within EU waters. Given that it is impossible to determine this accurately, the Italian Revenue Agency (along with the French & Maltese) has agreed that an assumed period can be applied to a leasing contract, based on certain criteria. Under the Italian scheme this is a combination of vessel type and size, so for a motor vessel over 24 metres in length, a rate of 6% VAT applies (30% of the standard Italian VAT rate of 20%)

In other words it has been assumed that a vessel of this size (24 metres plus) would spend 30% of its time in EU waters (ie the European summer for example) and outside EU waters for the remainder of the year (the Caribbean for example) The table below shows the various rates which have been agreed under the Italian leasing scheme:

Motor or sailing over 24 metres in length VAT: 6%

Sailing between 20.01 - 24m VAT: 8%

Motor between 16.01 - 24m VAT: 8%

Sailing between 10.01 - 20m VAT: 10%

Motor between 12.01 - 16m VAT: 10%

Sailing up to 10m VAT: 12%

Motor between 7.51 -12m VAT: 12%

Motor up to 7.5m VAT: 18%

Category D (protected waters only) VAT: 20%

The French leasing scheme is very similar and is based on the same principles of assumed time in EU waters. Their categories are based on the Class of vessel as shown in the Certificate of Registry. The French VAT base rate is 19.6%, and the minimum payable under the French system is 9.8% for a Class 1 vessel (50% of 19.6%)

The most recent country to introduce a leasing incentive is Malta, and with a lower VAT base rate of 18%, their rates vary from a minimum of 5.4% to a maximum of 18%.

Having covered the basic principles of what a leasing scheme is, and how it works, we can now consider the mechanics of acquiring a vessel using a European lease as follows:

Example - Individual Purchase Of A New Boat From UK Broker/ Manufacturer

1.The client chooses the boat and agrees a price with the dealer/broker or manufacturer. 2.The client agrees a deposit and lease period with the bank. 3.The bank pays for the boat. 4.The boat is leased to the client who pays installments at the reduced rate depending on the scheme, vessel type and size. 5.At the end of the contract the bank sell the yacht to the client at the agreed 1% residual value. Full rate VAT applies to this payment as this is a transfer of goods. 6.The boat is now VAT paid.

The above example is for an individual (or group of individuals) purchasing a boat using a European leasing scheme. In two cases it is possible to have a VAT free lease as follows:

• A charter business buying a vessel which is used 100% for chartering in EU waters.

• An individual buying a vessel for use 100% outside EU waters

Detailed below are some of the main features of the leasing schemes:

• Leasing facility available from 300,000 euros ( no maximum )

• Initial deposit between 20% and 50%

• Lease maturity from 3 to 8 years

• Residual value 1%

• Available for both private and company ownership

• Available for both new and used boats

• Registration in virtually any country and any flag

• UK flag is available under the scheme

• Chartering is permitted within the lease agreement

As a specialist marine financial services broker, we are receiving an increasing number of enquiries from both the UK and Europe to arrange leasing schemes with our European banking partners. The schemes are straightforward to arrange and administer, and can offer significant savings in VAT. As a company we also offer a wide variety of more conventional marine mortgages as we believe that whilst leasing offers many advantages, this may not be appropriate for all our clients.

Car leasing is not only an appealing financial proposition to most auto-consumers, but also a lifestyle and preference choice.

Here a four key benefits of leasing a car.

1. Keeping up with the latest trends. Leasing is occasionally more of a personal and lifestyle choice than a financial one. Lots of people are not comfortable with the idea of owning a car over a long period of time. They’d rather keep up with the latest technology and safety innovation and drive the latest models every 2 to 3 years. If you are prepared to sacrifice ownership for the latest set of wheels, than leasing is your best alternative.

2. Leasing also offers buying flexibility: it allows you to defer the buying decision while using the car. You do not have to negotiate with your mechanic over repair costs, deal with large maintenance bills or worry about a depreciating asset. You are actually getting a test drive for the length of your lease. At the end of your lease, you can buy the car or simply turn in the keys and walk away.

3. Leasing offers numerous short-term benefits. It reduces your preliminary cash expense because you do not have to pay the large down payment required for car ownership. You only pay for the depreciation on the car - only the part you will use during your lease, not the entire vehicle. This results in lower monthly payments and frees even more cash.

4. Almost everything about leasing is negotiable. If you know all the fees involved, you can lower your monthly payments, negotiate the purchase price of the car at the end of the lease and contract additional miles on top of your mileage limit. You can also do some shopping around and compare deals from different auto-insurers to get the cheapest GAP insurance for your lease.

Today, many people are wondering if leasing or purchasing is the best when it comes to new cars. Both leasing and buying have wonderful advantages as well as their own disadvantages.

No matter if you plan to lease or purchase you will be more than likely making monthly payments. Leasing does give you a bit of relief in that your payments will be lower than if you were purchasing, however, you will never own the car. If you purchase, your monthly payment will be higher, but you will own the car after all your payments are complete.

You may hear that leasing is better by some of your family or friends and then you will hear some that buying is better. Before you make your own decision, you should learn the similarities and difference of both options.

When you decide to purchase a car, most people have to apply for a loan. Not too many people have enough cash lying around to pay for a brand new car; therefore, they apply for a loan. The loan consists of two charges, the principal charge and the finance charge. The principal charge is the total value of the car and the finance charge is the interest that is placed on the loan. You should shop around and find the best possible interest rate before applying for a car loan; you may find that you can receive lower monthly payment through your own bank than with the car dealership.

Remember, when you are making monthly payments to purchase a car, the car is yours as long as your make your payment. You can travel any place you would like to go and make any additions that you would like to your car or other customizations. It is your car unless you default on the loan and then the car can be repossessed by the loan company that gave you the loan to purchase the car.

There are a couple of disadvantages to purchasing a new car. Your monthly payment will be higher than leasing, is the number one disadvantage and the other is that you will have to sell the car if you do not want the car any longer.

When leasing a car you will have to make monthly payments that consist of two charges, a depreciation charge and a finance charge. The depreciation charge is the price that the car has gone down in price while you were using the car, this will give the dealership compensation for the depreciation value that you used. The finance charge is of course the interest that you are paying on the term of the lease.

When you lease a car, you will never become owner of the car. You cannot make any additions or customizations to the car. You cannot sell the car or trade it in if you get tired of it. If you decide to take it back and the lease is not up, you will have stiff penalties to pay. You will also not be able to go any place you like. When you are leasing a car, you are given a certain amount of miles that you are allowed to drive during the term of your lease. If you go over the amount of miles specified then you will have to pay for every mile that you go over the original amount.

The short-term advantages of leasing are of course the fact that the monthly lease payment is quite a bit cheaper than monthly payments for purchasing. A matter of fact the payments are between 30 to 60 percent lower than most loan payments.

However when it comes to long-term advantages purchasing wins hands down, if you do not plan on keeping the leased car after the term of the lease. If you plan on returning the car at the end of the term of the lease and leasing another car, of course, you will end up paying more in the long run. You will own your car after you have paid off your loan, however, with a leased car you will have to lease another one and another one compared to driving the same owned car over the same amount of time.

Leasing is based on the principle of “use-of vs. ownership.” A client makes money by using equipment, not by owning it. The following tips explain what a leasing consultant is and how they can improve your image and increase your productivity while you enjoy the rewards of higher profits.

1. THE PERSONAL TOUCH

You will never have to deal with sales managers, sales reps, account managers, or any other managers that come to mind. An independent is the only one who assists you with your client’s leasing/loan options. A good consultant will follow up to make sure you are satisfied with work that was done. They will also keep you current on the latest leasing news and trends.

2. QUICK ACCESS

Time is money when you cannot get a consultant to handle your client’s financing. An independent is one phone call away. He or she will keep you updated with emails, phone calls, or faxes throughout the process.

3. HIRE FOR PROJECT

Hire an independent for one lease/loan or for several. It costs nothing to have a vendor program in place, and leasing consultants are paid when the leasing transaction is successfully completed. Have a leasing/loan program in place with only one leasing company, not several.

4. TRAINING

The independent leasing consultant is highly trained both technically and on business issues. They know the ins and outs of leasing, and they specialize in your field. The independent is a teacher, trainer, author, and technician.

5. ATTITUDE

The independent leasing consultant is a highly motivated professional. They strive to help companies improve their image and increase productivity while repeating the rewards of higher profits by using, not owning, their equipment.

6. PAY FOR PRODUCTIVITY

The client will pay when equipment is successfully installed and inspected. The consultant is paid when transactions are successfully completed.

7. SECURE OFFICE

In order to run credit checks, all leasing consultants must maintain an office either at secured location within their home or at an outside location. To be in the leasing business, a leasing consultant is required by the credit agencies to maintain a secured location with locks on doors and file cabinets.

8. WEB SITE

Today’s leasing consultants must have a web site. Years ago, when I ran my software business, I did not have a web site because I did not need one. The Internet better defined today; it is quick and easy to send email, have a web site, and be in e-commerce.

There are two types of web sites: one that tells about the leasing consultant, and one that tells about the business. The web site is usually the name of the leasing consultant. It will contain a bio, articles, and maybe an EZINE from the leasing consultant. The other site is about their business, and includes the benefits of leasing and application forms for clients to fill out and send electronically.

Both types of web sites should navigate easily and give full contact information – business address, phone, and email.

9. A COACH

A leasing consultant coaches you through the lease process by asking questions and supporting the client. They work to get you and your clients the best leasing program available, and offer suggestions and opinions when needed. They bridge any gaps between your financials and your business, and can customize a lease that works best for you.

10. BUSINESS PERSON

An independent leasing consultant is a professional businessperson who runs a tight ship. They are in the relationship business and are not just financial geeks.