Driving a leased vehicle in Mauritius
Car leasing in Mauritius takes the form of a finance lease, in which the lessor owns the vehicle until the final purchase option, offered mainly to businesses by firms such as DBM Leasing, Cim Finance or the leasing arms of banking groups.
How a finance lease works in Mauritius
The lessor buys the chosen car from the dealer and makes it available to the lessee in return for monthly rentals in rupees. At the end of the contract, paying a residual value lets the lessee exercise the purchase option and become the owner.
Who offers car leasing
DBM Leasing, a subsidiary of the Development Bank of Mauritius, finances vehicles and equipment for micro, small and medium enterprises. Cim Finance and the leasing companies linked to the major Mauritian banks also offer contracts to businesses and individuals.
Supervision of leasing companies
Depending on their status, leasing companies come under the Bank of Mauritius when licensed as non-bank deposit-taking institutions, or under the Financial Services Commission for other activities. Their licence can be checked in the official registers.
Why companies prefer leasing
For a company, rentals are in principle operating expenses and the vehicle ties up no capital. Hotels, hauliers, security firms and tourist car hire agencies can therefore renew their fleets without a large upfront outlay of cash.
Leasing or a loan for a private individual
An individual can also lease, but only becomes the owner at the end of the contract. A standard loan or hire purchase remains more common, as the car loan in Mauritius page shows in detail for private buyers.
Long-term rental through dealers
A few dealers and rental firms offer long-term rental that includes maintenance, insurance and sometimes a replacement vehicle. The customer hands the car back at the end, with no purchase option, which suits businesses seeking predictable costs.
VAT on lease rentals
Lease rentals are generally subject to Mauritian VAT at 15%. A VAT-registered business can recover this tax under the rules of the Mauritius Revenue Authority, which is not the case for a private individual leasing a car.
Residual value and a larger first rental
The contract often sets a higher first rental and a residual value at the end of the term. The higher the first rental, the lower the monthly payments; the residual value should remain consistent with local resale prices.
Cyclone cover and maintenance imposed on the lessee
The lessee must insure the vehicle comprehensively in favour of the lessor and service it according to the manufacturer's schedule. After a cyclone or serious accident, the insurance payout goes first to the lessor, who owns the vehicle.
Vans, pick-ups and small trades
Couriers, tradespeople and small hauliers use leasing for a van or pick-up that is essential to their work. Other financing solutions for a small business are set out on the business loans in Mauritius page.
Ending a contract early
Early termination usually means paying the remaining rentals or a compensation sum set in the contract. Before signing, read the exit clause carefully, especially for a business whose activity depends on the tourist season and its swings.
The legal framework for leased vehicles
A leased vehicle is registered with the NLTA in the lessor's name or with its interest recorded. The lessee may not sell it, modify it or take it out of the country without written permission from the leasing company.
Setting up a car lease in Mauritius
- Choose the vehicle and obtain a quote from the Mauritian dealer.
- Request proposals from DBM Leasing, Cim Finance or your bank's leasing subsidiary.
- Compare the first rental, monthly payments, term, residual value and arrangement fees.
- Provide the business or personal documents and wait for approval.
- Take out comprehensive insurance in favour of the lessor before delivery.
- Sign the contract, take delivery of the vehicle and set up the rentals by direct debit.
Cost elements of a Mauritian car lease
| Item | Amount | What determines it |
|---|---|---|
| First rental | Percentage of the price, indicative | Lessee's choice and lessor's policy |
| Monthly rentals | Variable, in rupees | Vehicle price, term, residual value |
| VAT on rentals | 15% | Recoverable by a VAT-registered business |
| Residual value | Set in the contract | Term and vehicle model |
| Comprehensive insurance | Annual premium | Value, business use, drivers |
Documents for a leasing application in Mauritius
- Business Registration Number and company certificate
- Recent financial statements of the business
- Business bank statements
- Identity documents of the directors or the individual
- Payslips for a salaried lessee
- Vehicle quote
Points to watch before signing a car lease in Mauritius
- Comparing only the monthly rental without adding the first rental, residual value and fees to get the real cost.
- Assuming a private individual can recover the 15% VAT on rentals like a VAT-registered business.
- Underestimating the early termination charge you would owe if business slows down outside the tourist season.
- Handing over or lending the vehicle to a third party long-term without the written consent of the lessor, the sole owner registered with the NLTA.
- Accepting a no-deposit lease offered on social media by a company that appears in no official register.
Lenders to contact
- MCB (Mauritius Commercial Bank): Leading Mauritian commercial bank offering, among other products, a personal loan to help individuals finance their everyday projects.
- MCB (Mauritius Commercial Bank): Leading commercial bank in Mauritius offering personal loans and home loans, including an online application process for housing loans for residents.
- MauBank: Mauritian commercial bank offering a range of loans for individuals as well as dedicated financing schemes for local small and medium enterprises.
Mauritian car finance leases: your questions
Can a private individual lease a car in Mauritius?
Yes, some leasing companies accept salaried individuals, but the offer is mainly aimed at businesses. A private lessee cannot recover VAT and should compare the total cost with a car loan or hire purchase.
Who owns a leased car in Mauritius?
The leasing company remains the owner until the residual value is paid. The lessee uses, insures and maintains the vehicle, but cannot sell it or pledge it as security while the contract is running.
How does a Mauritian car lease end?
Under a finance lease, the lessee can exercise the purchase option by paying the residual value and become the owner. Under long-term rental, the vehicle is simply returned, subject to the agreed condition and mileage.
Does DBM Leasing finance large companies?
DBM Leasing focuses mainly on micro, small and medium enterprises for their vehicles and equipment. Large companies tend to deal with the leasing subsidiaries of banks or with specialised finance companies instead.