Leasing
These are commercial lending products and not covered by the National Consumer Credit Protection Act.
Finance lease
There are various types of lease finance, the most common lease is a finance lease.
In a finance lease the lessee (customer) finds a motor vehicle or plant and equipment (“goods”) and the finance company purchases the goods on their behalf. The finance company calculates a regular lease rental which can be made monthly/quarterly or seasonally to suit the customer’s cash flow. The rental includes GST.
At the end of the term a residual value is still owing and the customer normally gets the option to purchase the goods for the agreed residual value, plus GST. Once the final payment has been received ownership of the goods passes to the customer.
This type of finance suits customers who do not wish to pay a deposit or trade in a vehicle and to finance the lot.
Operating lease
In this case the finance company buys the vehicle and charges a regular monthly rental for the use of the motor vehicle or plant and equipment (“goods”). At the end of the term the finance company takes back the vehicle, the customer has no responsibility to buy the goods.
Other expenses can also be included in the rental including the ongoing maintenance, fuel and other running costs which are incorporated into the monthly rental.
Novated Lease
This is a commercial financial product.
A novated lease is ideal for employees who have the option of receiving a car as part of their salary package. The employer pays all rental payments to the finance company and the employee enjoys full use of the motor vehicle.
The employee, then novates the lease to their employer, who assumes some of the employee’s rights and obligations under the lease, including responsibility of meeting the lease rentals.
The contract is in the name of the employee who remains the registered owner throughout the lease and keeps effective control of the vehicle at all times.
If the employee leaves the company, the vehicle remains with the employee. In this situation, generally the employee takes over the payments or gets their new employer to make the payments. This means, the original employer is not left with an unwanted car and the employee keeps the vehicle.
Should you wish to talk to us about a lease, please complete the Loan Enquiry Form or give us a ring on 1300 559 974.
52 Wyndham Street
SHEPPARTON VIC 3630
Ph 1300 559 974
