Car Finance Lease
Terms
Lease term is up to you but would typically be 1 to 5 years
Type of vehicle
Vehicle choice is up to you and your budget!
Up-front costs
Up-front costs usually include the first month’s rental, stamp duty and registration fees, although you can normally finance the on-road costs.
Repayments
Monthly payments are always in advance, depending on the lender the first rental will either be due at signing of the contract or it will be debited from your nominated bank account the next business day.
Balloon/Residual
A Finance Lease must have a balloon payment which reflects the value of the vehicle at the end of the term. Tax office guideline are:
- 5 yrs by 30%
- 4 yrs by 40%
- 3 yrs by 50%
Balloon variances of up to 5% either way are acceptable.
Insurance
Comprehensive motor vehicle insurance is the only insurance that can normally be incorporated within a lease.
Early termination
You are responsible for any early termination charges stipulated on the leas contract. Make sure you understand them.
Vehicle return
With a finance lease it is accepted practice to make an offer for the vehicle at the end of the term.
Future value
You are responsible for any difference between the residual value and the market value with a finance lease. You also have the option of refinancing the balloon amount over a new term if you choose to keep the car longer.
Maintenance
You are responsible for the maintenance of the vehicle during the lease term. An operating lease may include a maintenance contract which would transfer this responsibility to the lessor.
Kilometers during the term
An operating lease may impose a limit on the number of kilometres you may travel. However, bear in mind that the higher the kilometres the higher the lease rental. There will most likely be extra charges if the actual kilometres exceed the limit set on the contract when you return the vehicle. With a Finance Lease there are no restrictions, however, high kilometres will affect the resale value.
End of term
At the end of an operating lease you simply return the vehicle. With a Finance Lease you can return the vehicle and pay any difference between the residual value and the market price or make an offer to purchase the vehicle for the residual value.
Tax Benefits
You claim the monthly repayments as your tax deductible expense based on the percentage of business usage, together with the ongoing running expenses of the vehicle.
Claim limit
Passenger vehicles over the motor vehicle depreciation cost limit (also known as luxury car limit) cannot be claimed as a lease. This cost limit is indexed and adjusted annually. For the 2003/2004 income year the cost limit is $57,009.
Request a free no-obligation quote on a Finance Lease
Car Loan
Terms
Loan contracts are usually signed for 1 to 5 years
Type of vehicle
Vehicle choice is up to you and your budget!
Up-front costs
Up-front costs. Usually there are no upfront cost when taking out a consumer loan however sometimes a deposit may be required.
Repayments
Loan repayments are normally monthly in arrears, however different lenders may have a fortnightly option. You will also have the option of direct debit, BPay or payment book.
Balloon/Residual
It is uncommon to have a balloon payment on consumer loans, however the facility is available and applications are welcome. A balloon payment will reduce your regular repayments and assist your budget requirements.
Insurance
Commonly with consumer loans the lender will offer a number of different insurances that are designed to be a safety net in case of any unforseen problems.
Early termination
You are responsible for paying off the loan, there could be costs associated with early repayment of the loan.
Vehicle return
You keep the car! On making final payment you own the vehicle.
Future value
If you decide to sell or trade-in the vehicle at the end of the loan term, the risk of its future value is yours.
Maintenance
You are responsible for the maintenance of the vehicle.
Kilometers during the term
No limit. The vehicle is yours. Drive it as you please. However, the higher the kilometres, the lower the resale or trade-in value of your vehicle.
End of term
At the end of the loan term, the vehicle is yours to keep.
Tax Benefits
You can claim depreciation of the purchase price of the vehicle plus interest charges as your tax deductible expense based on the percentage of business usage, together with the ongoing running expenses of the vehicle.
Claim limit
The claimable depreciation is limited by the motor vehicle depreciation cost limit. The purchase price above this limit cannot be claimed. The portion of interest calculated for the amount over the limit also cannot be claimed.
Request a free no-obligation quote on a Car Loan
Hire Purchase
Terms
Loan contracts are usually signed for 1 to 5 years, but again it is up to you.
Type of vehicle
Vehicle choice is up to you and your budget!
Up-front costs
Up-front costs usually include the first month’s rental, stamp duty and registration fees, although you can normally finance the on-road costs.
Repayments
Monthly payments are always in advance, depending on the lender the first rental will either be due at signing of the contract or it will be debited from your nominated bank account the next business day.
Balloon/Residual
Unlike Lease, with Hire Purchase you have the option with or without a balloon. The balloon does little to your overall tax claim, and its main benefit is to suit individual budgets and affordability. Typical terms and balloons are similar to that shown in Lease column.
Insurance
Commonly with CHP loans the lender will offer a number of different insurances that are designed to be a safety net in case of any unforseen problems.
Early termination
You are responsible for paying off the loan, there could be costs associated with early repayment of the loan.
Vehicle return
You keep the car! On making final payment (including a balloon payment if applicable) you own the vehicle.
Future value
If you decide to sell or trade-in the vehicle at the end of the loan term, the risk of its future value is yours. You also have the option of refinancing the balloon amount over a new term if you choose to keep the car longer.
Maintenance
You are responsible for the maintenance of the vehicle.
Kilometers during the term
You are responsible for the maintenance of the vehicle. No limit. The vehicle is yours. Drive it as you please. However, the higher the kilometres, the lower the resale or trade-in value of your vehicle.
End of term
At the end of the loan term, the vehicle is yours to keep (provided all payments have been made, including a balloon payment if applicable).
Tax Benefits
You can claim depreciation of the purchase price of the vehicle plus interest charges as your tax deductible expense based on the percentage of business usage, together with the ongoing running expenses of the vehicle.
Claim limit
The claimable depreciation is limited by the motor vehicle depreciation cost limit. The purchase price above this limit cannot be claimed. The portion of interest calculated for the amount over the limit also cannot be claimed.
Request a free, no-onligation quote on a Hire Purchase
For more information on the best finance selection for you, or to request a free, no obligation quotation, click here or call 1300 346 227 and speak with one of our friendly finance consultants.