Operating Lease
An Operating Lease is similar to a long term rental, whereby a vehicle is rented for a specific term and kilometre limit at a fixed monthly rental. |
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| Under an operating lease arrangement the client has no rights to the ownership of the vehicle. The vehicle is owned by the Financier and as such is returned to the financier at the end of the term. |
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| Normally Operating Lease will have a term ranging from 1 year up to 4 years. |
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| With Operating Lease all vehicle-operating costs can be included in the one fixed monthly rental or alternatively a program can be tailored to suit the clients specific needs. The standard Operating Lease includes the following: |
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- Choice of vehicle
- Service and maintenance up to the specified kilometre limit.
- Annual re-registration for the term of the contract.
- A specified number of tyres.
- Full comprehensive insurance.
- Roadside service.
- Fuel card.
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| Early termination Of an Operating Lease |
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| All Operating Lease Agreements are able to be terminated prior to the expiration of the term, however an early termination fee is payable should the lease not reach its termination date. The fee will vary depending on how close the lease is to its termination date and the vehicle type. |
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- With Operating Lease the client only pays for the use of the vehicle not the ownership.
- No risk on resale value of the vehicle.
- The Monthly rental is normally fully tax deductable.
- Vehicles on Operating Lease are “Off Balance Sheet”
- Operating Lease can also be salary sacrificed via a Novation agreement.
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