Operate leasing: The leasing variant simply explained

Operate leasing is a short-term variant of the form of financing. Here we explain exactly what is behind this leasing type - simple and understandable.

Operate leasing is like leasing

Leasing allows you to finance expensive products, for example cars. The lessor leaves the product to the lessee for an agreed useful life and receives regular payments, the leasing installments. Such leasing transactions can be differentiated according to different criteria. One variant is operating leasing, also known as operating or operational leasing.

• A key feature of Operate Leasing is that there is no fixed basic leasing period. The leasing company provides the customer with the leased item against payment of the leasing installments.
• As a rule, both contracting parties have the right to terminate the contract. Alternatively, termination can be completely ruled out, but then the contract is concluded over a very short term.
• At the end of the term, the lessee returns the leased property. There is no purchase option. The product remains the property of the lessor. He must also write it down over the period of use.
• The lessor also bears the economic risk. This applies to defects and repairs, because the lessor is responsible for this. He also has to bear the risk of technical aging. Due to the short-term leases, he has to rent a leased item as often as possible.
• Operate leasing is well suited for short-term and temporary needs, for example as a replacement for repair-related failures of production machines. In addition to machines, all other objects for operational leasing that can be rented at any time, including office rooms or buildings, are considered.

Advantages of the leasing form

Operative leasing is a flexible form of financing to temporarily finance products. This is a good way to bridge bottlenecks in production or other company areas.

• Due to the lack of a basic rental period, the lessee only uses the property as long as he really needs it and does not have to be bound by fixed terms.
• Unlike other forms of leasing, the lessee does not have to worry about repairing and maintaining the leased items. That is the job of the lessor.
• The lessee can record the lease payments as an expense. According to this, operating leasing is not at the expense of its creditworthiness.
• Real leasing: Renault Zoe for less than 100 euros - the electric car bargain

In the next article we will explain the difference between leasing and financing.