Finance Lease
A Finance Lease or Car Lease is a commercial finance product which enables the customer to have the use the equipment and the benefits of ownership, while the financier retains actual ownership of the equipment.
A Finance Lease can also be known as an Asset Lease or Vehicle Lease.
How does Finance Lease work?
The financier purchases the equipment on behalf of the customer, who then leases the equipment back from the financier and pays a fixed monthly lease rental for the term of the lease.
At the end of the lease the customer can either pay a residual value (final instalment) on the lease and take ownership of the car, trade it in or re-finance the residual and continue the lease.
Benefits of a Finance Lease
Who does a Finance Lease suit?
Finance Leasing is suitable for companies, partnerships, sole traders and individuals where the leased vehicle is used for income producing purposes. It is also ideal for employees who want to salary package a vehicle through a Novated Lease as part of their remuneration.
Tax implications of a Finance Lease.
GST is charged on the monthly lease rental and on the residual value at the end of the lease. Where the customer is registered for GST, they can claim some or all of the GST contained in the lease rental and the residual value as an input credit on their next Business Activity Statement.
Where the amount financed is below the Depreciation Limit the customer claims the lease rental as a tax deduction. Above the Depreciation Limit, interest charges on the lease and depreciation up to the value of the Depreciation Limit can be claimed.
Other options
If you are considering a Finance Lease or car leasing in general, you may also want to consider other business car finance options such as a Commercial Hire Purchase (CHP).
Want to know more?
If you have any questions or would like to know more what Finance Lease, please call us on 02-42-72-8250, send an email or complete a contact us form and we will contact you shortly.
You can also get an online quote.
A Finance Lease or Car Lease is a commercial finance product which enables the customer to have the use the equipment and the benefits of ownership, while the financier retains actual ownership of the equipment.
A Finance Lease can also be known as an Asset Lease or Vehicle Lease.
How does Finance Lease work?
The financier purchases the equipment on behalf of the customer, who then leases the equipment back from the financier and pays a fixed monthly lease rental for the term of the lease.
At the end of the lease the customer can either pay a residual value (final instalment) on the lease and take ownership of the car, trade it in or re-finance the residual and continue the lease.
Benefits of a Finance Lease
- Flexible contract terms ranging from 24 to 60 months (two to five years)
- Fixed interest rate
- Fixed monthly lease rentals
- Costs are known in advance
- A residual can be applied to a lease, lowering monthly payments
- Tax deductions are available when the vehicle is used for business purposes
- As the GST contained in the car's purchase price is claimed back by the financier, only the vehicle's price exclusive of GST is financed, lowering monthly payments
- Ability to make advance lease payments for tax deduction or cash-flow purposes
- The lease is secured against the vehicle, allowing lower interest rates
Who does a Finance Lease suit?
Finance Leasing is suitable for companies, partnerships, sole traders and individuals where the leased vehicle is used for income producing purposes. It is also ideal for employees who want to salary package a vehicle through a Novated Lease as part of their remuneration.
Tax implications of a Finance Lease.
GST is charged on the monthly lease rental and on the residual value at the end of the lease. Where the customer is registered for GST, they can claim some or all of the GST contained in the lease rental and the residual value as an input credit on their next Business Activity Statement.
Where the amount financed is below the Depreciation Limit the customer claims the lease rental as a tax deduction. Above the Depreciation Limit, interest charges on the lease and depreciation up to the value of the Depreciation Limit can be claimed.
Other options
If you are considering a Finance Lease or car leasing in general, you may also want to consider other business car finance options such as a Commercial Hire Purchase (CHP).
Want to know more?
If you have any questions or would like to know more what Finance Lease, please call us on 02-42-72-8250, send an email or complete a contact us form and we will contact you shortly.
You can also get an online quote.
Carruthers Financial Services was established in 2000 filing the service void left by the major banks by providing a mobile, one on one service. We not only help you arrange your finance, but we continue educate and work with you on a regular basis, so you can achieve the Australian dream of owning your own home sooner. 
