The Benefits of a Finance Lease

When it comes to choosing a vehicle financing option for your business, it can seem a daunting task. There are a plethora of options to choose from and this can be quite confusing. What is the best option? Do the options have any concealed conditions that could give you a nasty surprise in the future? For example, a condition of some of the options is that you share ownership of your new fleet vehicles until you have paid off the loan completely.

If you would like to stay away from such unfavourable conditions and just have a straightforward financing option without the headaches, you might want to think about going for a standard Car Finance Lease.

How Do Finance Leases Work?
Essentially, a finance lease is just a rental agreement between you and the lease provider. The lease provider will continue to be the owner of the vehicle while the lease is in force. However, unlike a conventional lease agreement, the payments you make on the vehicle will be put towards the agreed value of the car. This means that you get to own the vehicle in full once the lease is paid off. The advantage for you is that since the lease provider still owns the vehicle and not you, the company that provides the lease has the responsibility of ensuring the vehicle is in good working condition. If happens to your vehicle or it fails to operate as intended, then the lease company should in most cases transfer your lease to a similar but working vehicle. Please ensure you check the terms and conditions of your lease to confirm this is true.

Am I Eligible For a Finance Lease?
To be eligible for a finance lease, the main condition is that you use the vehicle in the main for business. Each lease provider will have different business usage requirements but as a rule of thumb, make sure you use your vehicle at least 50 to 60% for business. Most businesses are generally eligible for a finance lease.

What Options Do I have?
If you choose to proceed with a finance lease, then take the following into consideration:
- How long would you like the lease to be?
- What balloon payment would you like to pay at the end of the lease? In other words, after the lease is paid, there will be a lump sum that needs to be paid. Make sure you confirm this so you are not caught out.

Some lease providers may also allow you to take out an extended lease. With this option, as new vehicles become available, you can trade in your old vehicle for a new one. You will continue to pay the lease for a longer term however you now have a new car.

Also, as long as you meet business usage requirements, there may be certain tax deductions that you can take advantage of.

Take the time to do your research thoroughly and find the most appropriate lease. Every finance lease provider will offer you a different combination of interest rates and financing terms. So compare the various options to make sure you get the lease that best meets your business needs. Contact different lease providers and speak to them - make sure you let them know that you want a business lease quote and not a personal lease quote.

Things to compare include: interest rates, estimated payment amounts, the length of the lease and the final balloon payment. If you take the time to examine the different options and make suitable comparisons, you will be in a far better position to decide the best lease option for your business.

Article Source: http://www.free-article-info.com/ArticleDashboard

Zane Burnard, founded the Platinum Car Loans Group and is a novated lease specialist who has designed one of Australia's top fully maintained Novated Leasing products, which is a total vehicle management solution for both individuals and companies.

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated