Financial Lease

Calculated the same as Hire Purchase, with terms from six to 45 months (for business use) or from six to 48 months (for private use). The advance rental (deposit or trade-in) is usually paid immediately and there are monthly rentals with a balloon (lump sum) payment due at the end of the term.

If it is for business use the customer can claim the GST content of the rentals monthly, and up to the entire rental as a cost against their business, thereby reducing their tax liability. The car is off-Balance sheet so depreciation is not claimed.

For the private buyer a finance lease usually has slightly lower rentals than Hire Purchase as the GST content does not attract interest.

FINANCE PRODUCTS

	Hire Purchase
	Financial Lease
	Operating Lease