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What is leasing?‎

The term "leasing" is synonymous with "renting", and in its technical ‎connotation implies a special form of finance. In the latter case, the parties ‎enter into a contract regarding the utilization of a capital or durable consumer ‎good, or the benefits thereof, a good that can be the subject of a rental ‎agreement. In this type of contract the leasing company and the applicant are ‎in the roles of the "owner" and the "tenant", respectively. This type of contract ‎is referred to as a "lease contract" and the subject of contract is known as the ‎‎"object" of the rent.

In this type of transaction, the leasing company, using its own financial ‎resources, purchases the required good from the seller or manufacturer and, ‎after assuming its ownership, makes it available to the renter within the ‎framework of a rental or lease agreement. Throughout the duration of the ‎lease contract or at its termination, the lessee may return the good to the ‎lessor and terminate the contract. Alternatively, at the end of the contract, the ‎lessee has the option to pay the residual value of the good and assume its ‎ownership, in which case the leasing company is obligated to transfer the title ‎or deed to the lessee, i.e. hire-purchase.

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