Why You Should Consider a Finance Lease When You Buy Your Next Car
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Choosing the best option to finance your business vehicles can often seem quite arduous There are a large number of options to choose from and this can be quite confusing. Which option is the best for you? Do the options have any hidden clauses that could cause you unexpected difficulty down the track? nnIf you want to stay away from such unfavourable clauses and just have a straightforward financing option without the headaches, you might want to consider going for a standard Car Finance Lease. nnHow Do Finance Leases Work?nEssentially, a finance lease is simply a rental agreement between you and the lease provider. The lease provider will remain the vehicle owner while the lease is in force. However, unlike a conventional lease agreement, the lease payments will be allocated to the agreed value of the car. This means that you become the owner of the vehicle in full after the lease is paid off. The advantage for you is that because the lease provider still owns the vehicle and not you, the lease provider has the responsibility of ensuring the vehicle is in good working order. If happens to your vehicle or it cannot be used properly, then the lease company should usually transfer your lease to a similar but working vehicle. Please ensure you check the terms and conditions of your lease to confirm this is the case. n nAm I Eligible For a Finance Lease?nTo qualify for a finance lease, the main condition is that you use the vehicle primarily for business. Every lease provider will have different business usage requirements but as a rule of thumb, make sure the time you use your vehicle for business is a minimum of 50 to 60%. Most businesses are generally eligible for a finance lease. nnWhat Options Do I have?nIf you decide to go ahead with a finance lease, then take the following into consideration: n- Over how long would you like the lease to be?n- What lump sum amount would you like to pay when the lease expires Make sure you confirm this so you are not caught out. nnSome lease providers may also allow you to take out an extended lease. With this option, as new vehicles become available, you can trade in your old vehicle for a new one. You will continue to pay the lease for a longer term but you now have a new vehicle. nnAlso, provided that you meet business usage requirements, there are often some tax deductions that you can take advantage of. nnTake your time and do your research carefully and find the most appropriate lease. Every finance lease provider will offer you a different combination of interest rates and financing terms. So compare the various options to make sure you get the lease that best meets your business needs. Get in touch with different lease providers and speak to them - make sure you let them know that you want a quote for a business lease rather than a personal lease. nnIf you take the time to examine the different options and make suitable comparisons, you will be far better positioned to decide the most suitable lease option for your business.n
About the Author
Zane Burnard, founded the Platinum Car Loans Group and is a novated lease specialist who has designed one of Australia's top fully maintained Novated Leasing products, which is a complete vehicle management solution for both individuals and companies.
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