Lease Direct's Finance Lease is a tax-efficient way to finance vehicles. In effect you finance and pay for the depreciation of the vehicle during the lease period. At the end of the lease term you either buy the vehicle, for its residual value, or simply give it back.
Quick Overview
A Finance Lease Agreement is ideal if you want to:
- Use an asset without the immediate risk of ownership.
- Upgrade your vehicle with the latest or best models suited for your business.
- Have the choice of purchasing the vehicle at the end of the term or returning the vehicle.
- You get the vehicle you need without having to make a lump sum payment.
Benefits
- Cash Reserves can be preserved for other uses.
- Cash flow budgeting is made easy as a result of fixed monthly payments.
- No set up costs or other hidden costs, you just pay the regular lease installments.
- The only security required is over the vehicle itself.
Features
- 100% finance may be available.
- GST is recovered throughout the lease period.
- Interest rate is fixed for the term of the lease.
- Residual Value can be set to coincide with Depreciation values.
- Terms from 12 to 60 months
Risks With Lease to Own
- Maintenance is not covered.
- Residual Value (Last Payment) could be more than what the vehicle is worth.
Profits on sale of motor vehicles in the past do not automatically mean that there will be profits on sale in the future. The used car market can fluctuate from time to time. To make profits on sale, a low residual value or balloon payment has to be set which results in high monthly rentals thus adversely affecting cash flow. Compare your monthly finance lease rental or commercial hire purchase repayment against a Lease Direct Lease rental, and you will find that there will be a variance.
If you have any further questions just ring Free-phone 0800 532 733 or email info@leasedirect.co.nz and we will be only too happy to help you out.
