Operating Lease

An Operating Lease is one of the most attractive business car finance options for sole traders and small companies alike. An operating lease provides ‘all care and no responsibility.’ This type of lease is ideal if you were looking to never own the car you are planning to lease.


What is an Operating Lease?


An operating lease is similar to a hire purchase, but the monthly cost is based on a number of other factors, such as kilometres travelled each year, make and model of the car and the term of the lease. You are basically hiring the vehicle for a set period of time and paying for the privilege.

You pay the monthly rental over a fixed term and once this has finished, the car is handed back to the lender in good condition.

Throughout the lease, the lender remains the sole owner of the vehicle, which means you don’t carry any of the liability.


What Business Type does an Operating Lease Suit?


This type of business car finance would suit you if you plan to use the car for business purposes, more than 50% of the time. This is especially true the more kilometres you travel, as this can reduce your monthly payments.

So this would be a great option if you’re looking for a fleet of cars for your sales reps, as an example – if you have an idea of the average number of kilometres they travel each year, then we can provide you with some cost-effective repayment options.

Even if you’re only looking at one car for your business, an operating lease provides the least amount of hassle and provides you with a vehicle to use in as quickly as 2-3 days.


Benefits of an Operating Lease


One of the biggest benefits of this type of business car finance option is that your repayments are fixed and 100% tax deductible.

You don’t need to outlay any capital at the beginning of the lease and you can manage your cash flow much easier.

You also don’t have to worry about residual payments at the end of the lease either. It’s easy to see why this type of lease is so attractive to business owners.

Here’s a quick snapshot of what those benefits are:

  • No capital outlay required at all
  • Repayments are fixed over the term of the lease
  • Your lease repayments are 100% tax deductible, further reducing the amount you pay
  • You minimise your overall risk as far as car ownership is concerned, so don’t carry the liability

Australian Credit and Finance have access to over 13 lenders in this area, so we work with you to ensure that you get the right price and the best deal to suit your exact business car needs.

If you’re ready to look at Operating Lease options, talk to one of our experience team members today. We can provide you with recommendations on the right type of car for your business as well. Call us on 1300 735 557.