Car Lease

This commercial option allows your company to have use of the car, light truck or any type of commercial vehicle and enjoy the benefits of use of goods, the financier retains ownership of the vehicle.

Strictly speaking a Car Lease is a "Finance Lease" and has many applications for a business, but in our case the purpose is for leasing a vehicle.

• What is it?
• Why a Car Lease?
• Who does it suit?
• The Tax Man
• More information

How does a Car Lease work?

The Finance Company purchases the vehicle on behalf of your company and you pay the Finance Company a monthly amount for the term of the lease.

After the final payment has been paid, a residual value is payable to the Finance Company to take ownership of the car. If this option is not taken the company can re-finance the residual value and enter into another Car Lease.

Why a Car Lease?

• Contract terms from 12 to 60 months
• Fixed interest rate for the term of the lease
• Fixed monthly lease payments
• Costs do not change throughout the lease term
• The higher the residual, the lower the payments which can help cash flow
• When used for business purposes, Tax Deductions may apply
• Monthly payments are only for the non GST portion of the vehicles purchase price
• You can make payments in advance to get Tax Deductions or improve cash flow.

Who does a Car Lease suit?

A Car Lease will suit companies, partnerships, sole traders and individuals where the vehicle is used for income producing purposes.

The Tax Man and your Car 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 ($57180) - also known as a Luxury Car Tax (LCT) 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.

Want to know more?

If you have any questions or would like to know more about a Car Lease, please send us an online enquiry and we will contact you soon.

Alternatively you can use the Online Calculator to get an idea of what you can afford.