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MORE ON LEASING


A lease is a long-term rental of a vehicle for a set number of months (term) and is available to individuals and businesses.

 

The lessee makes an advance rental payment, followed by regular fixed monthly payments.

 

At the end of the lease term there is an agreed residual value which can be tailored

to manage your monthly rental payments. The major advantage of a lease is that it makes budgeting easy as it can be set up with your specific cash flow requirements in mind and it may also offer some users significant tax benefits.

 

Terms range from 12 to 45 months for cars, and 12 to 60 months for commercial vehicles like utes, work vans and other business vehicles.

Benefits

  • The advance rental payment, fixed monthly payments and residual value can all be
  • tailored to suit your cash flow requirements.
  • Cash flow advantages – fixed and known monthly costs.
  • Monthly payments are based on the GST exclusive cost of the vehicle.
  • Other lines of credit are unaffected as this is a standalone arrangement.
  • There is no initial capital outlay, freeing up capital for other business requirements.
  • GST may be able to be claimed on the monthly rental payments as they are paid

Business Customers

The term of the contract may determine the accounting and tax treatment of the lease.

 

Lease term 45 months or less

  • The monthly rental payments may be tax deductible as an operating expense.
  • The vehicle is regarded as ‘off balance sheet’.

Lease term 45 months or greater

  • The vehicle is deemed an asset.
  • Interest charges and depreciation may be able to be claimed.

Operating Lease

An operating lease is a long-term rental of a vehicle for a set number of months (term) and is ideal for business fleet situations or where employees have the choice of their company vehicle – i.e. “you choose” situations.

 

The lease company owns the car and the lessee makes monthly rental payments for the

use of that vehicle for a specified term (up to 45 months) and number of kilometres. At the end of the lease term the vehicle is returned to the lease company and the residual value is the responsibility of the lease company.

 

There are two types of operating lease:

Fully maintained operating lease

This lease includes the cost of fully maintaining the vehicle, such as routine maintenance and servicing, warrant-of-fitness, initial and re-registration, tyres and batteries.

 

Non-maintained operating lease

This lease includes the initial registration, however the costs of maintaining the vehicle

are at the lessee’s expense.


  • The lease term;
  • The pre-agreed kilometres the vehicle will travel during the lease term; and
  • The services included (a fully maintained operating lease will mean a higher rental
  • cost)

*  We recommend that you get advice from your accountant or tax advisor. 

 

Suzuki Finance leases are provided by MARAC Finance Limited and are subject to MARAC’s normal lease credit criteria.  Fees and charges may apply Go to MARAC’s website to view the full fee schedule.