How Car Leasing Became So Pleasing
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by: Galway
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Word Count: 546
Date: Wed, 4 Mar 2009 Time: 12:00 AM
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The leasing of personal property has been around a lot longer than you probably think. There has been a huge growth in the United States for leasing businesses since people have viewed it as being a good way of obtaining capital. But this is not a new discovery, clay tablets that date back to as far as 2010 BC from the ancient city of Ur (modern day Tell el-Mukayyar) show that Priests were renting farming tools to farmers at a price as well as the land they worked on.
Later in time, the Egyptians, Greeks and Romans all used leasing as a form of business to rent out personal property and farm land. A lot of leasing within history also came from the shipping business; interestingly the net lease provisions known in modern leases are referred to as 'pay come hell or high water'. This all originates from ancient ship charter agreements.
It was in America that the first known leases of personal property were recorded in the 1700's. Property such as horses, wagons and wagons were rented out by liverymen and stables. By the 1870's modern equipment such as barges, locomotives and car leasing were all being financed under equipment trust certificates.
During the 1900's it was railroad equipment that was being commonly being rented under a leasing arrangement where the railroad leased with a manufacturer for the purchases of railroad cars. With an initial payment expected to be paid with a contract resembling a conditional sale contract.
By the 1920's manufacturers wished to increase the sales of their equipment, which consequently ended up with the advancement of vendor leasing. Manufacturers did promote the sales of their products with instalment sales contracts that were cut-price to both banks and finance companies.
All through the last century, various incentives to leasing arose including the Second World War causing
companies to choose capital acquisition methods that did not involve too much heavy investment in the making of equipment that would be made redundant after the war. Different types of short term leases began to be created such as a machinery lease that included an operator. Long term leases appeared in the late 40's with railroad equipment.
In the fifties the United States leasing Corp became the first company to lease general equipment in which it is still organised today. Several other companies than began to emerge such as Chandler Leasing, General Electric Credit Corp and Commercial Credit Corp. These were the first leasing companies to begin their business, now amongst the hundreds of equipment leasing companies that exist today, such as car leasing.
As technology has progressed so has the leasing industry, in the 60's Xerox and IBM realised how much potential business could be created by leasing out their computers and office equipment. As most of the equipment was just being introduced to companies and would guarantee commerce.
After this many industries began to realise the promise with leasing. Leasing became seen as a respectable business move other than seen as a negative one. Since then the business has just grown and creates billions of dollars within the U.S each year. One of the most popular forms of this leasing is car leasing when companies save financially more money than if they had brought brand new.
About the Author
Shaun Parker is a car engineer with many years of experience in the leasing industry. Find out more about car leasing at http://www.ambervehiclesolutions.co.uk
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