Finance Lease
The lending financial institution purchases the vehicle on behalf of the client and leases/
rents the vehicle back for a period of up to five years.A finance lease is structured to contain
a residual value at the end of the loan period.A residual value is the estimated value of the
vehicle at the conclusion of the finance lease.Residual values are calculated by Australian Tax
Office guidelines.At the end of the loan period the lending institution will contact the client
and offer three choices how to settle the residual value.They are:
⇒ Pay the residual value with your own funds and own the vehicle.
⇒ Trade the vehicle in and the trade in will be paid out by a licenced motor dealer.
⇒ Refinance the residual value for a further period of 12 – 24 months.
The tax benefit to the client is the monthly payment is fully tax deductible,for eligible clients.
Chattel Mortgage
The financier purchases the vehicle and passes ownership on to the client.The financier
secures their financial interest by placing a mortgage on the vehicle/chattel through the
national PPSR register.Client hires the vehicle from financier for the term of the loan.
Client can claim the full amount of GST in the vehicle price in the following BAS subject
to being registered for GST.Any early termination of loan will require a pro rata portion of
GST claimed to be refunded to the Australian Taxation Office.
Terms of loan are up to five years with the option of a balloon payment up to 30%.
Corporate Hire Purchase
The financier purchases the vehicle and passes ownership on to the client.The financier
secures their financial interest by placing a mortgage on the vehicle through the national
PPSR register.Client hires the vehicle from the financier for the term of the loan.
Client can claim the full amount of GST in the vehicle price in the following BAS subject
to being registered for GST.Any early termination of loan will require a pro rata portion of
GST claimed to be refunded to the Australian Taxation Office.
Terms of loan up to five years with the option of a balloon payment up to 30%.
Novated Lease (Salary Sacrifice)
Novated Lease is the most popular choice for a salaried employee to purchase a motor
vehicle.The lease is a three way agreement between the financier,employer and employee.
Firstly the employee purchases the car of their choice and completes the lease with terms
available up to five years with a residual value compliant to Tax Office guidelines.
Secondly the employer completes a sub lease agreement,ensuring payments are the
employers responsibility by way of being deducted from the employees pre tax salary package.
Insurance,registration and maintenance costs are the responsibility of the employee,under
a salary sacrifice Novated Lease.These costs can be added to the lease under a different
category of Novated Lease called a Operating Lease.
Benefits to the employee are payments are made out of pre tax income,and the loan is
portable as if the employee leaves their job,then the car and loan goes with them.
If you require the best car finance package,call Wayne and the team at Loan-s on 0418 266 994.
Or apply online HERE for a quick professional approval.
