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Lease FAQ's

1. What is operating lease in case of vehicles?

The contract is entered into between the leasing company (Lessor) and the Corporate (lessee) to provide vehicles for a predetermined term for use by lessee or its employee. The leasing company is the legal owner of vehicle and passes on the right of use of the car to the Lessee for the duration of contract. Upon expiry of lease period, the vehicle is returned back to the leasing company and the lessee does not have the option to buy the vehicle.
Duration of the contract is from 1 to 5 years from date of its first purchase and not beyond 5 years.

2. How does it work?

Lessor procures the vehicle as per specifications provided by lessee and delivers the same to the lessee for the pre-decided tenure (from 1 to 5 years, not exceeding 5 years in any case) on lease along with fleet management services taking away all the hassles of managing comprehensive maintenance, insurance renewal, damage repairs & insurance claims, replacement vehicle, pick up & drop, 24*7 emergency road side assistance for a worry free driving experience during the term. The Lessor charges a fixed lease rental to be paid monthly, quarterly, half yearly or annually as decided between lessor and lessee.

3. What are the advantages of leasing?

  • For the Employee:
  • Expert advice for selection of vehicle and arrangement of test drive on call
  • Best deal and discounts
  • Hassle free experience
  • Tax savings as lease rentals paid through pre-tax component of salary
  • For the Corporate:
  • Off balance sheet transaction with no capital expenditure
  • Fixed budgets and planned cash flow as no risk on resale or repairs & maintenance
  • Reduced in-house administration as whole fleet management is outsourced
  • Employee satisfaction and retention

4. What is Residual Value (RV)?

The value of the car at the end of the tenure is known as Residual Value. The lease rentals are calculated in such a way that the employee pays only for the usage of the vehicle and not the residual value. It is determined depending on risk profile of asset, the kilometers and several factors that have an impact on it.

5. What are the fleet management services that Avis offers?

In the Avis Red Carpet Lease product, Avis offers a full service operating lease that offers you a comprehensive mobility solution with value added services to offer a superior experience to customers. The details of the all the services are mentioned below:
  • New vehicle selection and buying as per employee requirement: Avis would assist the employee right from sharing vehicle models, variant options, reviews on each of them including arranging for test drives, expert consultation, prices and best negotiated deals.
  • Instant mobility service where vehicle selected is in waiting: This is a unique service proposition, where Avis would offer an appropriate replacement vehicle to the employee whose desired vehicle is in waiting beyond 10 days. Instant mobility rental shall be agreed and charged separately.
  • Comprehensive Repairs and Maintenance coverage: To provide total peace of mind solution to the employee, a comprehensive coverage on all kinds of repair and periodic maintenance including tyres and battery is offered. All expenses related to vehicle repairs and maintenance gets covered under fleet management rental repairs arising due to misuse or negligence. The employee does not have to pay anything to the service center for the items included in the contract. The rental varies with the term and kilometers of running opted for the specific vehicle model/variant.
  • Damage Repairs management through comprehensive insurance policy cover: All accident damage repairs are covered under its comprehensive insurance policy coverage through its preferred insurance service provider. Insurance management is part of the fleet management services that includes its renewals and services for claims settlement.
  • Accident Depreciation Waiver: To provide hassle free & zero cost accident damage repair experience to customers, depreciation component of damage repairs claims like plastic parts, glass etc. Is paid by Avis.
  • Replacement Vehicle: In case vehicle is going to garage for mechanical repairs work or accident repairs work, Avis Lease would provide a replacement vehicle within possible timeframe. This service would immensely assist employees to continue with their regular routine and ensure uninterrupted mobility during the lease tenure.
  • Pick and Drop service for repairs / maintenances: Avis Lease would provide pick up service for the vehicle to be sent to Service Station for maintenance or repair work and deliver the vehicle back to the employee.
  • AVIS Assist - 24*7 road side assistance for emergency: Mobility for employees also means exposure to risk due to breakdown; the Avis 24*7 road side assistance service would be available to employee as part of Red Carpet Lease.
  • Stay New Plan with periodic mint conditioning service: Another of our unique propositions revolves around our basic premise of keeping our leased vehicles in the best shape at all times and delivering a quality service to our clients. Under this service Avis would provide Mint conditioning service for vehicles under Lease on a periodic basis, wherein the vehicle would undergo interior and exterior re-conditioning.

6. I already have a car can it be converted to an operating lease model?

Avis can buy your vehicle at the prevailing market price arrived at through independent bids and lease it back to you. Avis may also undertake to include fleet management services and take risk on its future residual value. The maximum tenure cannot exceed 60 months from the date of first registration of the vehicle i.e. if the car has completed 24 months at the time of Sale & Lease Back transaction, the maximum tenure it can be leased will be 36 months.

7. What kind of insurance is provided with the car?

Avis provides car with comprehensive insurance cover through its preferred insurance service providers. Various add on covers are offered and employee may opt for additional cover as per need. In addition to it, Accident Depreciation Waiver service offered by Avis covers the excess, loss and depreciation component of damage repair claims.

8. What are the exclusions in the fleet management service contract?

The minor repairs like tyre puncture, minor scratches & pollution check etc are to be taken care by the customer. Cosmetic jobs like extra washing / cleaning, drying wet carpet, antirust treatments, Teflon coating, 3rd party towing bills or any incidental charges in case of breakdown and / or accident, use of additives, Repair of improper repairs carried out or attempted to do so, Crane, Hydra or special transportation services, retrieval of vehicle, charges for Toll, fuel or any other incidental charges, scratches where repainting is required but not covered under insurance, repairs arising due to misuse/ negligence/ damage/ missing items or from use of vehicle not as specified in the owner’s manual supplied by its manufacturer

9. What do I do in case of an accident?

In an unfortunate case of an accident, kindly inform Avis to render all the necessary help to deal with the situation. Avis will take necessary action to get the vehicle repaired from Avis preferred authorized workshop.

10. What happens in case of theft or total loss?

In case the vehicle is stolen or is declared total loss, complete documents along with FIR and No Trace Certificate has to be obtained and provided to Avis. In valid claims, the contract will be terminated on the payment of the difference of the Book Value and amount paid by the insurance company. If Total Loss Retention has been opted for that the amount will be capped as per the terms decided in the Master Lease Agreement.

11. What happens if I leave my company in the middle of the lease contract?

If the employee is joining another company, lease rental can be transferred to the new company subject to Avis and the new employer agree to get in to an agreement. However, if this is not possible, the contract can be closed as per the terms agreed. Alternatively, the same can be passed on for use to any employee in the same company. Or any employee is eligible to buy the car at the fair market value at the discretion of the leasing company.