Serbia - Watch what kind of leasing are you signing! Will your money be returned in case of theft or total damage of automobile?

When you are signing a contract with a leasing company, it is necessary to check what kind of contract is being signed, in order to avoid the situation that, in case of total damage or vehicle theft, you stay without both money and car.

When you are buying automobile on leasing, total insurance policy is on the name of the leasing company, which is the owner of the automobile until you pay the rest of the debt. Whatever happens, from the smallest scratches to the total damage or theft, the user of leasing is obliged to report that to the insurance company and the leasing compnay as a damage. Insurance company estimates the damage and delivers letter of guarantee to the authorized service in which the car is repaired. Leasing company signs the report, which means that it agrees with the way the situation is handled. The main dilemma is whether the misfortunate user of the automobile, who have not repaid the automobile yet, will get his money back, in which period and in which way.

Božidar Milojičić, director of Istrabenz leasing, ensures that there is no reason for worry. So far they have had 13 cases of theft and 3 cases of total damage and all users of the leasing have been paid regularly on time. According to his words, the user of leasing, in case of total damage or automobile theft, is obliged to report that to the police, leasing company and insurance company. In case of theft, there is legal period of 30 days for finding of a car. When it passes, the insurance company is obliged to pay the damage to the leasing company within next 7 days.

When the money is paid to the bank account, the user of leasing is invited, the agreement is signed and the difference is paid. For example, if the car is stolen after 3 months, the buyer, i.e. the user of leasing, owes another 57 installments. If we take for example that he pays installments for ``Yugo``, for which monthly installment amounts to €55, the accounting is as follows: 57 installments is multiplied with €55 accounted according to the exchange rate of NBS on that day. The money obtained from the insurance company is used for payment of the debt, without compensation of the expenses for policy and registration. Rest of the money is returned to the user of leasing, with note that the value of the automobile is reduced by the worth of the amortization, which is, in this case, about 3%. The user of leasing also insures VAT, so that, in that case, insurance company also pays the tax to the user.