Operating Lease - Business Car
An operating lease is where you lease a motor vehicle without you taking the risks associated with owning the motor vehicle or having to outlay any capital to make the purchase.
The finance provider retains ownership of the vehicle while you are provided with full use of the vehicle in return for a fixed monthly rental matched to a term and distance suited to your needs. At the end of the operating lease term, the vehicle is simply returned in good condition and your finance obligation ends.
How does an Operating Lease work?
An operating lease is simple. You choose a motor vehicle, decide on the term and work out how many kilometres you will travel each year. You pay a monthly lease and at the end of the term hand the motor vehicle back to the finance provider.
An operating 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. It is also a great option if you would like no residual risk at lease end and will travel plenty of kilometres per year.
What are the benefits of a operating lease?
- You don't worry about residuals and balloon payments, as there is no risk to you.
- Operating lease terms range from 24 to 48 months.
- No capital outlay is required to fund the purchase of vehicles.
- The fixed car lease rentals are on a single monthly invoice allowing easy and accurate budgeting.
- Operating lease repayments are fixed for the term.
- The car is funded externally and not shown on the balance sheet.
- There is a reduction in the time and expense of administration, especially when taken with full maintenance.
- Car lease rentals are usually fully tax deductible (except for luxury vehicles).
- There are no costs or liability associated with vehicle disposal.
- You control vehicle maintenance and servicing.
- Vehicle acquisition is by Vehicle Select.
- We can have you in your new car within 24 to 48 hours.
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