In this article, we will see the steps that needs to be followed to buy a car under company car lease policy. Many of the corporate organizations offers car on lease to its employees as an employee benefit but hold on a second - do you think it is easy to get it as it sounds ? Well, the answer is it depends. You might be able to get it with much ease but others may encounter lot of difficulties including me.
So here I am not just going to explain you the entire process but also the real time challenges that you might encounter along with the process that needed to follow. You can get the process from your organization knowledge base but the real question is does it work as stated ? I would like to hear from you after going through the below steps.
How to Buy a Car under Company Car Lease Policy?
Step 1: Getting Vendor Details
First you need to get the correct lease vendor details from your organization who is the leasing vendor from your organization end. Sometimes this is a very cumbersome task because the link or detail that might be shared with you in the knowledge base could be way old or not updated properly. So you might have to do a bit of follow up to get the right contact details.
Step 2: Contact Your Lease Vendor
Once you have the lease vendor details, you need to contact him/her and get it verified if the given contact is the right one. Once it is verified, the lease vendor will ask you to get PROFORMA INVOICE from Car Dealer. So the next task is to contact showroom and get this invoice. In case you are not aware, a proforma invoice is a temporary or preliminary invoice used to request payment from the buyer of the products before it was being supplied.
Step 3: Getting Proforma Invoice
When you talk about getting proforma invoice from showroom then there is a chance that they will ask you to pay some amount which would be refundable after purchasing the car. If you are a first timer and is not aware of the process then there is a high chance you will end up in paying the amount as asked.
In reality, you don't have to pay a single penny for booking a car. The amount will be demanded by giving a reason that vehicle has waiting period somewhere between 4 to 6 months(not always the case with every car), so if the price changes after let's say 1 or 2 month, then again a new proforma invoice needs to be issued for the updated price and have to follow the same process. While this is correct but not always the case.
Price does not change that much frequently until and unless there is some special situation and even if showroom has to issue a new proforma invoice for the updated price, then they should issue and follow the process without charging any money. It does not cost anything.
While this being said, in reality the amount is only demanded for the reason that once you pay the amount, then you cannot back off and now you have to place the order in the time limit as given in the terms and conditions of the proforma Invoice. This also means that you have to bear the pressure of doing the follow up with the lease vendor and with your organization to get all the relevant documents stamped and signed within the given time limit. If you don't then your money is gone.
Another reason for demanding money is that usually after giving all the documents, car lease vendor has to place a purchase order(PO) and will only release the amount after the car delivery data is provided. This means that now there is a pressure on showroom to get your car as soon as possible so that they can get their payment. So to avoid this scenario an amount is demanded from you which will now put you on receiving end to get the vendor release the payment as soon as possible so that the amount given by you does not go wasted.
Another interesting reason that I found out is that in many cases Car dealer wanted to sell their products to customer but since customer knows that showroom prices are usually higher than what you can get from outside so they found little difficult to sell it directly hence they use the booking amount to put the so called minimum car accessories and deduct the money from there. Then if something left out from that booking amount, it will get returned.
Step 4: Getting Lease Calculation
After receiving the Proforma Invoice, car lease vendor will create a lease calculation based on the number of lease years you would like to take. It will contain information like car ex showroom price, vehicle registration state, car registration and RTO Expense, 1st year Insurance, Car Accessories etc. The most important thing in this lease calculation for you is the Total Amount(Base Rental+GST) that you need to pay monthly to your organization for the number of lease years taken. This is the amount which will be deducted from your Salary.
Step 5: Getting Finance Approval
After getting the lease calculation details, car lease vendor will ask your organization finance team approval to process it further. When you reach out to the Finance team, they will probably ask you to fill a form based on certain format where you need to provide all the Car details along with the other information. After checking all the details, finance team will provide the approval.
Step 6: Release Purchasing Order(PO)
This step is little bit tricky to deal with when your car has long waiting period. Car dealer will ask to place a purchasing order to be in queue and the lease vendor will ask for vehicle delivery data to release the purchasing order. At the end of the day, it is up to you to convince both side to deal with this situation.
But just to tell you a quick solution, this situation is difficult to deal with when you did not pay the booking amount. As soon as you pay the booking amount, this problem will get automatically resolved. So much uproar and drama just to take the booking amount !!
Step 7: Provide Details to Lease Vendor
Before releasing Purchasing Order, there is a chance that lease vendor will ask you to fill a form where you need to provide all your employee related information including your residential address along with the Car details. After providing these details, lease vendor will release Purchasing Order(PO).
Step 8: Documents needed from Dealer
Also releasing the Purchasing order, lease vendor will ask for Original E-Invoice and Debit Note from the Dealer along with GST details.
Step 9: Documents needed from Lease Vendor
Then in the next step, after providing all the documents, dealer will ask for Insurance copy from Lease Vendor. But the lease vendor won't provide the Insurance copy until dealer provides original Tax Invoice, Debit Note and all other documents. Please note that dealer will also ask for Organization address proof and Pan Card details.
Step 10: Getting Your Car Delivered
After receiving the Insurance copy, pretty much all the formalities are completed. Now you need to wait for your Car Delivery based on the waiting information given to you. Probably dealer would keep you informed about your car waiting period in state as well as in all over the country.
These were pretty much all the major steps you needed to follow to buy a car under company lease policy. Please let me know if the above information is helpful to you !!