A Car Finance Lease is an agreement between a financier (lessor) and the customer (lessee) where the lessor purchases a vehicle for the lessee who uses for the vehicle for the life of the term in exchange for regular payments. There are options to choose from at the conclusion of this type of loan making it ideal for those who need flexibility.
A Car Finance Lease is suitable for all types of businesses and business purposes and allows for many types of purchases including vehicles, equipment and machinery.
How does a Car Finance Lease Work?
A financier purchases an item based on the lessee’s needs and agrees to lease the item back to them offering fixed repayments over an agreed length of time anywhere from 1 year to 5 years. The lessor can offer loans from $10,000 and up.
There is flexibility in this type of loan as upon its conclusion the customer is free to pay the residual amount and take ownership or give the asset back to the financier for them to sell on your behalf.
The Ins and Outs of a Car Finance Lease
The benefit of this arrangement means flexibility in the contract terms, residual amount and repayment schedule. There are also fixed interest rates, tax breaks and GST benefits.
- Full purchase can be financed
- Asset itself can be used as security
- Tailor your repayments by setting a comfortable residual amount
- Interest rate is fixed
- Repayments are fixed for the term of the loan
- Options at the end of the lease for resale and upgrade, re-lease and ownership
- Choose repayment frequency to suit your business cash flow
- Repayment methods include BPay, D-debit, coupon book and periodically
Tax Information for Car Finance Leases
The use of the vehicle for business purposes allows the leaser to claim associated expenses through their business. This means that there are some distinct advantages for the customer to increase affordability of purchasing the vehicle for business purposes.
- Claim full repayments as a tax deduction – dependent on business usage percentage
- No GST is charged on the purchase of the car as the financier claims GST via ITC
- Claim running expenses of your vehicle
Need Further Car Finance Lease Information?
Call one of our experienced financial consultants on 1300 361 360. Alternatively you can use the quick quote form online and one of our consultants will be in contact with you very shortly.