1300 Car Finance

Finance Lease

A Finance Lease is an ideal way for self employed and business customers to acquire a new vehicle without tying up valuable capital. You may also be surprised how affordable and tax effective a Finance Lease is when purchasing your new car.

What is a Finance Lease?

A finance Lease or Car Lease is a rental agreement where the financier purchases the vehicle on behalf of the customer who in turn pays the financier a rental amount for the term of the lease.

After the final payment has been paid, a residual value being the predetermined vehicle's value is payable to the Finance Company to take ownership of the car. If this option is not taken up, you may simply return the vehicle to the financier and start a new Lease.

Who is eligible for a Finance Lease?

A Finance Lease is an attractive finance option for sole traders, partnerships, Trusts and companies who will be using their vehicle predominantly for business use.

This option can also be suitable for an employee who receives a car allowance or wishes to salary package a new vehicle as part of their remuneration package.

Benefits of a Finance Lease?

• Finance Lease payments are tax deductible and enable a business to preserve cash flow and utilise the capital elsewhere in the business.
• By choosing the option of a Finance Lease, you finance the vehicle retail price excluding the GST component which ultimately means you are reducing the amount to be leased. The GST in this case will be claimed back by the financier.
• Flexible lease terms and residuals to suit your individual budget and cash flow.

Finance Lease and Tax

fI the amount to be financed is below the ATO depreciation limit, $57,180, you may 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 vehicle's value can be claimed.

GST will be charged on your monthly payments; however it can be claimed back on your company's next Business Activity Statement (BAS) over the term of the Lease contract.

Refer to ATO guidelines for more information.

Need a car finance quote?

For more information or if you have any questions about a Finance Lease, just call 1300 Car Finance thats 1300 227 346 and speak to a qualified finance consultant or why not complete our friendly online finance enquiry form and a experienced finance consultant will contact you shortly.