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CAR LEASE

A Lease or Finance Lease is a commercial finance product which gives your business (the "lessee") the use of a car or commercial vehicle owned by AFS (the "lessor"), for a stated period of time in return for regular payments ("lease rentals") which are generally tax deductible.

AFS purchases the car or commercial vehicle on your behalf and then leases it back to your business in return for fixed monthly lease rentals. At the end of the lease you can either pay the final instalment (the "residual value") on the lease to take ownership of the car, trade it in or re-finance the residual and continue the lease; it's that simple.

 

A Finance Lease is suitable for companies, partnerships, sole traders and individuals where the leased vehicle is used for income producing purposes. It is also ideal for employees who want to salary package a vehicle through a Novated Lease as part of their remuneration.

The key feature of a lease is the separation of ownership and use of the leased asset. AFS, as lessor, retains legal ownership of the assets receiving all lease rentals under the agreement and is entitled to the return of the assets that are subject to the lease. Your business, as lessee, has the possession and right to use the assets for the term of the lease in consideration for which your business makes lease rentals to AFS.

GST is charged on the monthly lease rental and on the residual value at the end of the lease. Where your business is registered for GST, it can claim some or all of the GST contained in the lease rental and the residual value as an input credit on its next Business Activity Statement. Where the amount financed is below the depreciation limit your business can claim the lease rental as a tax deduction. Above the depreciation limit, interest charges on the lease and depreciation up to the value of the depreciation limit can be claimed.

A Lease normally has provision for a predetermined residual value to be satisfied at the end of the lease term. At this stage, you may wish to re-lease the goods or to satisfy your obligations with regards to the residual value.

This non-equity form of financing enables your business to free up cash resources from the purchase of assets for other uses. The rental nature of a lease also assists insulate a business from technological obsolescence.

Car Finance Lease Essentials

Interest Rates from:

5.70%

Fixed Rate Lease for a new vehicle or truck#

Benefits of a FInance Lease:

  • Preserve Cash Flow: Preserves the existing cash and credit facilities of the lessee's business. Funds can either be invested in more productive areas of their business, or maintained to take advantage of an unexpected business opportunity.
  • Specific Asset Security: The lessee does not have to tie up additional business and/or personal assets.
  • No Initial Cash Outlay: 100% financing of the value of the goods.
  • Fixed Cost Contract: A fixed rate and term make for accurate budgeting and also provides a hedge against market fluctuations.
  • Flexibility: Lease rentals can be specifically structured to suit the business cash flow, including the ability to make advance lease payments.
  • Tax Treatment: Lease rentals, and the associated costs of running the specific asset, are allowable tax deductions if the asset is used to generate assessable income.
  • Low Monthly Repayments: As the GST contained in the car's purchase price is claimed back by AFS, only the vehicle's price exclusive of GST is financed, lowering the monthly lease payments.
  • Simplicity: Finance Leases require minimal business administration.
  • Certainty: Residual value is predetermined

# Commercial rates are only available for novated leases or businesses with a registered Australian Business Number (ABN) and where the goods being financed are predominantly for business use. Interest rate only applicable for new goods that have not been pre-owned and where the applicant has an established good credit history and contributed a minimum deposit of 20%. Finance subject to approval, including the application of applicable lending criteria. Terms and Conditions apply. Fees and Charges are payable. Credit provider is Automotive Financial Services – Australian credit licence 383762. 

Fixed Rate Car Lease - Finance Lease

from
5.70%
p.a# 

Interest Rate
30% to
60%
of Purchase Price

Balloon Amount

1–5
years

Lease Term
$15,000
to
$100,000

Lease Amount

Monthly

Repayment Frequency

Fees

Fees that will apply on settlement

The following upfront credit fees and charges are payable to AFS on the settlement date of the lease.  They are only payable if you proceed with the lease and are included in the lease amount.

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FEE TYPE DEFINITION AMOUNT
Establishment Fee Represents the reasonable cost for AFS to provide the lease to you $445
Credit Search Fee Represents the reasonable cost for AFS to conduct the necessary credit bureau searches per applicant $10.47
Security Registration Fee Represents the reasonable cost for AFS to register our financial interest in the goods $9.50

The following fees and charges are payable to AFS during the term of the lease.

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FEE TYPE DEFINITION AMOUNT
Monthly Administration Fee Represents the reasonable monthly cost for AFS to administer your lease whilst active $12

The following fees and charges may become payable to AFS during the term of the lease.

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FEE TYPE DEFINITION AMOUNT
Early
Termination Fee ##		 Represents the fee that will be payable when you pay out your lease contract in full before the expiration of the term of the lease. The amount of the fee as at the disclosure date is the early termination fee percent applied against of the interest rebate if the lease contract is paid out anytime after the settlement date. 30% of the interest rebate
Dishonour Fee Represents the reasonable cost for AFS to process the dishonour of a lease payment on each occasion $12
Repayment Book Fee Represents the reasonable cost for AFS to generate and issue a new repayment book on each occasion $35

Fees and Charges disclosed above are current as at 1st October 2019 but may change from time to time. Other fees and charges may be payable. Please review the fees and charges detailed in the pre-contractual statement for the specific loan or lease that you have chosen.

# Commercial rates are only available for novated leases or businesses with a registered Australian Business Number (ABN) and where the goods being financed are predominantly for business use. Interest rate only applicable for new goods that have not been pre-owned and where the applicant has an established good credit history and contributed a minimum deposit of 20%. Finance subject to approval, including the application of applicable lending criteria. Terms and Conditions apply. Fees and Charges are payable. Credit provider is Automotive Financial Services – Australian credit licence 383762.

## Only applicable for the AFS Finance Lease product. Please read the relevant product Terms & Conditions and pre-contractual statement (if applicable) if you are considering another loan product or lease.

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How to apply

 

Applying for a finance lease online is fast and easy with AFS.

What's more there are no fees or charges payable to apply, even if you're approved!. Fees and charges are only payable if you decide to proceed with the lease.

Simply select any "Apply Now" button to get underway.

What to expect

STEP 1

Allow 10 minutes to complete your application online

STEP 2

Once you have submitted the application, you will receive an email notification advising you that we have received your application and commenced the assessment process

STEP 3

You will also receive a number of disclosure documents by email. Please read these and save them for future record

STEP 4

We will respond to you within 2 working days:

  • To advise you of the application outcome once we have assessed your application and verified all the information you have supplied
  • To obtain further information in order for us to complete processing your lease

STEP 5

If you don’t have all the information you need, you can save a partially completed application and return to it, within 14 days, to complete the required information. We will issue you a secure login and password to the email address you supply us.