Finance Lease Benefits
There are many benefits available to you and your business in setting up a finance lease and these can be further enhanced in partnering with PAR Leasing.
Flexible lease terms
With PAR Leasing our lease terms are flexible, clients can choose to finance a vehicle for anywhere between 12 to 84 months.
Fixed interest rate applies
The interest rate is fixed for the term of the finance lease. So you are not exposed to any fluctuations during the lease term. Which assists with budgeting.
Lower interest rate
Interest rates on loans can be higher, especially on vehicles, with a finance lease, the amount is secured so the interest rates are generally lower.
Option to own the vehicle at lease end
Under a finance lease, you are building equity in the vehicle during the lease term, and at the end of that term, you have the option of owning the vehicle, by paying out the residual value on the finance.
PAR Leasing finances the vehicle
PAR Leasing will provide finance on the entire vehicle, including any options or modifications that are made to the vehicle.
Generally lease payments are tax deductible, and will reduce the amount of tax your company pays.
As the financier PAR Leasing claims the GST on the purchase price of the vehicle, which means that the amount financed is GST exclusive.
GST is payable on the monthly lease rentals that you pay to PAR Leasing, but these are claimable as Input Tax Credits by your company.
With a finance lease, the monthly rental amounts are set at the lease start and remain constant for the contract term. This means that the lessee pays a fixed monthly amount which assists with cash flow and budgeting.
Things to consider when setting up a finance lease
Secured Asset Arrangement
Since PAR Leasing secures the asset, it has the right to repossess the vehicle if a lessee cannot make payments. It is the legal owner of the asset.
A failure to make payments on the lease will result in negative credit ratings.
There is no protection should a lessee run into difficulties making payments. You carry the risk on the finance.
Use of equipment
Not using the equipment does not absolve lessee of the responsibility of making payments. A lessee will have to pay an early termination fee if they wish to end the lease early.
Terms and Conditions
A lessee should take the time to understand the terms of a lease arrangement in full before entering into the arrangement.