1300 Car Lease

Enquiry Form

What is a finance lease?

A finance lease or car lease is a rental agreement, the vehicle is owned by the finance provider or lender (the lessor) and then leased to the user (the lessee) for a set term. A finance lease allows the user to have full use of the vehicle and has a predetermined residual value.

A finance lease or car lease is also known as a car lease, auto lease, vehicle lease or asset lease.

How does a finance lease work?

The Lessor obtains legal ownership of the car to be leased, by paying the amount as advised on the (vendor's)supplier's invoice. The Lessee then has the use of the car and pays rent for that use for the term of the finance lease contract. During the term of the finance lease agreement, the Lessee merely pays rent and does not obtain ownership or equity in the car they are leasing. Under a finance lease agreement the Lessee is responsible for maintenance and running costs, car-insurance and registration fees for the leased item.

Residual and terms

The finance lease residual is the amount that will need to be paid to the finance provider at the end of a finance lease. Finance lease residuals are set by the Australian Taxation Office (ATO).

Click here for a detailed summary of all residual values and balloon structures. Car Lease Residuals

What are the benefits of a finance lease

• Finance lease terms range from 12 to 60 months
• Rentals fully tax deductible if used for business use
• Interest rate is fixed for the term.
• Finance lease repayments are fixed for the term.
• Lower interest rates due to the finance lease being secured against the vehicle.
• GST on the purchase price of the vehicle is claimed back by the finance provider on your behalf. This lowers the amount financed to the purchase price minus GST.
• GST on the monthly repayments may be claimable on your BAS.
• We can have you in your new car within 24-48 hours.
• You will receive great hands on personalised service from an experienced car leasing consultant.

Who should consider a finance lease?

A finance lease is suitable when you use your vehicle wholly or predominantly for business purposes. This means that the vehicle is used for business for more than 50% of the time.

What are the tax implications of a finance lease?

If the amount to be financed is below the ATO depreciation limit, $57,123, you are able to claim the full lease rental as a tax deduction. Above the depreciation limit, it's similar to a hire purchase agreement where the interest and depreciation up to the value of the depreciation limit can be claimed. Refer to ATO

GST is also claimable on the monthly finance lease payments, these can be claimed on you BAS.

Are there any other options?

If you are thinking about doing a finance lease, you may also want to consider a Commercial Hire Purchase, Chattel Mortgage or Novated Lease as other car leasing options.

Need further information?

Either complete our friendly enquiry form and we will call you shortly or call the number 1300 Car Lease (1300 227 532) and talk to an experienced car leasing consultant today.

Enquiry Form