Vehicle Lease or Loans Lease
At Yesloans we can give you access to the best car lease financing options in Australia.
What is a car lease?
A car lease is a rental agreement where the Loans provider purchases the motor vehicle on behalf of the customer who in turn pays the financier a fixed monthly rental amount for the term of the car lease.
After the final payment has been paid, (residual amount which is set by the ATO) the customer takes ownership of the motor vehicle.
A car lease is also known as a Loans lease, auto lease, vehicle lease or asset lease.
How does a car lease work?
The lessor obtains legal ownership of the motor vehicle to be leased, by paying the amount as advised on the (vendor's)supplier's invoice. The lessee then has the use of the car and pays rent for that use for the term of the Loans lease contract. During the term of the car lease agreement, the lessee merely pays rent and does not obtain ownership or equity in the car they are leasing. Under a car lease agreement the lessee is responsible for maintenance and running costs, car-insurance and registration fees for the leased item.
Car lease features
- Low establishment fees and monthly fees, no payout penalties
- Car lease terms range from 1 to 5 years
- Interest rate is fixed for the term
- Car lease monthly repayments are fixed for the term
- The car lease monthly repayment maybe 100% tax deductible
- Residuals are set by the ATO and reduce your the repayment
- GST on the purchase price of the vehicle is claimed back by the Loans provider on your behalf. This lowers the amount Loansd to the purchase price minus GST
- GST on the monthly repayments may be claimable on your BAS
Car lease taxation implications
If the amount to be Loansd 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 commercial hire purchase agreement where the interest and depreciation up to the motor vehicle's value can be claimed.
GST will be charged on your monthly payments, however it can be claimed back on your Business Activity Statement (BAS) over the term of the Car Lease contract.
The monthly repayment or balloon amount is subject to GST.
Who does a car lease suit?
A car lease suits someone who is going to use a motor vehicle predominately for business use, therefore this car financing product is used by Companies, Trusts, Sole Traders, Partnerships and ABN holders.