Vehicle and Equipment Leasing Limited (Vaell) has signed a partnership with Car & General that will allow it to lease cars to individuals and small and medium sized entities.
This is the first time Vaell has opened its leasing services to individuals and small businesses.
Since its establishment over a decade ago, the firm has only been leasing its cars and equipment to companies and government entities.
According to Vaell, the numerous customer demands for such a leasing model is what has made them come up with the innovative product.
“Leasing has been commonly done to corporates and not individuals. But with the growth in the sector and with the demand we are getting innovative and coming up with various leases to cater to all. Government, corporates, SMEs and individuals,” said Vaell’s country director Judyanne Wanjiku.
The company will lease vehicles and equipment to individuals under a scheme referred to as wholesale leasing. In wholesale lease agreement, suppliers and dealers get the full value of their equipment upfront while Vaell manages the lease rentals on their behalf.
Leasing refers to a business model that allows customers to use assets without acquiring their ownership rights. It helps to acquire use of assets cost effectively.
Insurance and maintenance costs of leased assets if often bundled into one lease rental offering customers reprieve in additional costs.
Clients can choose whether to shoulder cost of maintaining the assets (dry lease) or passed on to the lessor. Car & General will first lease delivery vehicles, motorcycles and later progress to forklifts, generators and tractors.
Under the wholesale lease agreement, a customer wishing to rent a motorcycle with dealer buying price of Sh97,444 will pay in monthly cash lease prices of Sh6,000.
However, the client has the option of paying the rentals per month or on a quarterly basis.
“The product allows motor vehicle and equipment dealers to negotiate lease arrangements for their clients through an independent leasing company. This is a very attractive lease model and we foresee more uptakes in the near future,” said Ms Wanjiku.
The lease duration can be between one and three years. Individuals leasing the asset are allowed to trade them in for new models.
SMEs that meet the minimum lease requirements are eligible to rent vehicles and equipment. They include six months bank statement, recent management accounts and three years audited accounts.
This article first appeared on the Business Daily Africa website. (Tuesday, September 1 2015 )