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Finance Lease
Home / Loans and Finance / Vehicle Finance / Types of Vehicle Loan / Finance Lease /
Similar to a Chattel Mortgage, a Finance Lease is deisnged for self-employed clients that will use the items/goods in principally for business use. The main point of difference is that the title or ownership of the goods remains with the financier until the agreement has been paid in full. GST also applies to the loan payment and consequently is not as common today.
Examples of goods financed under a Finance Lease are:
- Motor Vehicles
- Marine
- Trucks
- Earthmoving Equipment
- Office Equipment
- Machinery
Terms & Conditions
- The financier has security over the goods being leased.
- The maximum lease term is 5 years.
- A lease agreement must have a residual value to be paid at the end of the lease term.
- The residual value must represent the estimated value of the goods at the end of the lease.
- The first lease rental can be up to 25% of the purchase price, therefore resulting in low rentals for the remainder of the lease.
- GST applies to repayments.
- Other terms and conditions may apply at the lenders discretion.
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