Net Advantage To Leasing - NAL

DEFINITION of 'Net Advantage To Leasing - NAL'

The total monetary savings that would result from a person or a business choosing to lease an asset, as opposed to purchase it outright. The benefit of leasing is determined by comparing the net present value of purchasing the asset outright to the net present value of leasing it.

BREAKING DOWN 'Net Advantage To Leasing - NAL'

Depending on the level of detail necessary in the calculation, NAL present value calculations can take into account depreciation, the average expected life of the asset, cost of repairs to the asset, expectations of interest rate changes and so on. In simplistic cases, NAL is expressed as the money that would be saved by leasing an asset instead of buying it, not taking into account the cost of capital.

RELATED TERMS
  1. Capital Lease

    A lease considered to have the economic characteristics of asset ...
  2. Closed-End Lease

    A rental agreement that puts no obligation on the lessee (the ...
  3. Operating Lease

    A contract that allows for the use of an asset, but does not ...
  4. Lease Utilization

    A financial ratio that measures how much a company uses leasing ...
  5. Leasehold

    An accounting term used to classify an asset on a company's balance ...
  6. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
Related Articles
  1. Managing Wealth

    What is a Capital Lease?

    A lease considered to have the economic characteristics of asset ownership.
  2. Investing

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  3. Retirement

    Retirees: Should You Buy or Lease Your Car?

    To buy or lease – that is the question. For retirees, access to safer cars, comprehensive warranties and tax deductions may drive up leasing's appeal.
  4. Personal Finance

    When Is Buying A Car Better Than Leasing?

    People who lease a car are often more concerned with the short-term picture.
  5. Personal Finance

    Auto Leasing Hits Record High in Q4

    Auto Leasing is continuously growing in popularity as a preferred choice of financing.
  6. Managing Wealth

    4 Ways to Get the Best Deal on a Car Lease

    Car buyers typically negotiate when purchasing a vehicle, but many don't negotiate when leasing a car. There are several ways to save if you ask.
  7. Personal Finance

    Auto Leasing Hits Record High in Q4

    On Thursday, Experian Automotive – a company that tracks financing options for new and used vehicles – released a report that highlights more consumers are leasing, rather than buying, new or ...
  8. Personal Finance

    How Does a Modified Gross Lease Work?

    A modified gross lease is a rental agreement where, in addition to their rent, tenants pay a share of other costs associated with the property.
  9. Personal Finance

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  10. Personal Finance

    Rental Properties: Cash Cow Or Money Pit?

    Create a valuation system to forecast the profitability of an income-producing property.
RELATED FAQS
  1. Why might a bond agreement limit the amount of assets that the firm can lease?

    Bond covenants can limit the amount of leases a company can have because leasing contracts are a form of debt. Taking on ... Read Answer >>
  2. You are currently reviewing the following information for JKL Corp ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
  3. How have low interest rates affected lease rates in the automotive sector?

    Find out how and why lower interest rates for leasing new automobiles have helped spur more consumers to lease cars instead ... Read Answer >>
  4. At the beginning of the year, HIJ Corp. began to lease new equipment ...

    The correct answer is: b) Total Lease Payment = Interest expense + Principal repayment Step 1: Interest expense = 8.5% of ... Read Answer >>
  5. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  6. At the beginning of the year, ABC Corp. began to lease a major piece of equipment ...

    The correct answer is: A) Under the capitalized lease method, the lessee must treat the asset as if it was purchased with ... Read Answer >>
Trading Center