Finance Lease
Once again, suitable for both private and business purchases. Often referred to as a 'lease with the opportunity to own' by many this is basically a flexible operating lease (for tax purposes).
Entry into a finance lease can be from as low as the first monthly payment in advance maximising the ability to get into a vehicle primarily out of cash flow as opposed to savings. You are not locked into a term allowing you the ability to downsize or upgrade as you wish. Terms from 12 to 60 months for private individuals or 12 to 45 for business transactions. A residual value (balloon payment) is calculated to mature at the end of the term. With a finance lease the leasee carry's the residual risk.
Why Finance Lease
- Advance rental / deposits to suit. Subject to approval.
- Pay from cash flow (e.g. suits clients that have a vehicle allowance) as opposed to using your own capital to get into a vehicle.
- Not locked in for the term.
- Ability to eventually own the vehicle should you choose / make an offer to purchase.
- Ability to expense the business use portion of the lease payment. GST claimed on the monthly payment. This depends on how you structure the contract and the term you choose.