Car Leasing

Car Finance

A car lease is a different form of vehicle funding distinct from a loan.

Car Leasing

When leasing a vehicle, the ownership of the car rests with the lease company, and not with yourself. Usually there is an agreed limit on the amount of kilometres that can be travelled. Customers often sight the reason for choosing a lease is that they are able to buy the vehicle they want with lower repayments.

Car Lease - How they operate

Prior to thes commencement of the agreement, a fixed monthly rental is agreed upon, and the financier purchases the vehicle and then subsequently leases the vehicle back to the customer. By the end of the lease period, the customer usually has three options. The customer has the choice to;

• purchase the vehicle at the agreed value, or to;
• refinance the residual, or;
• trade the vehicle in.

Car Lease - Tax

GST plays a part in two ways. Firstly, repayments attract GST, which most likely may be able to be claimed back by you depending on your business structure (importantly, whether you are registered for GST). Secondly, the GST payable on the residual value may also be able to be claimed.

If the amount financed is below the depreciation limit (presently $57,180) then the lease rental may able to be claimed as a tax deduction.

Please contact an accountant for taxation advice before making any financial decision

Vehicle leasing - Options

There are other options for individuals and businesses keen to secure finance for a vehicle. This include a commercial hire purchase, a chattel mortgage or a conventional loan.

Next Steps

If you would like to get in touch with one of our consultants to discuss leasing, please complete a online application; or

enquire or contact us regarding a pre-approval for finance.