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Fully Maintained Operating Leases

Cars line  (150 x 104)

Fully maintained operating leases are a viable option for any business with a number of essential work vehicles, whether they are cars, delivery vehicles or heavy transport,

Properly constructed operating leases make the management of company vehicle fleets smooth and simple;

  • reducing administration,
  • improve cash flow,
  • eliminating the end of term risk with the value of vehicles, and
  • operating lease companies provide reporting systems that simplify tax reporting.

How does a fully maintained operating lease work?

An operating lease is a rental, the leasing company owns the vehicle, and rents it to your business over a contracted term between 12 months and 60 months.

You choose the vehicle that’s right for your business, and decide the appropriate lease term, based on the number of kilometres that you expect the vehicle to travel each year.

The leasing company includes registration, insurance and tyres for the lease duration. It also includes servicing and maintenance. These are included in the agreed monthly lease payment. There are usually some restrictions on where servicing can be carried out, fuel purchased etc., as the leasing company will have negotiated pricing on parts, servicing and fuel.

The leasing company will provide the quote, order the new vehicle and have it delivered to your business.

At the end of the lease term, you just hand back the vehicle to the leasing company.

Benefits of Fully Maintained Operating Leases include:

  • Flexible contract terms (from 12 to 60 months)
  • No capital outlay required to fund the purchase of vehicles
  • Fixed car lease rentals as a single monthly invoice for easy and accurate budgeting
  • The car is funded externally and not shown on the balance sheet as a liability
  • No costs or liability associated with vehicle disposal
  • GST can be claimed on the monthly finance lease payments
  • Choose the vehicle you want
  • Lease company handles the purchase process entirely
  • Less administration time and expense on your part
  • Lease expenses are fully tax deductible up to depreciation limit

Correct estimation of annual kilometres travelled is absolutely critical, and it’s preferable to err on the conservative side as the leasing company bases its rental on a calculation of the vehicles value at the end of the term. It will also affect the provisioning for tyre replacement, servicing etc.

To find out how much a fully maintained operating lease can save on your next vehicle - contact AFNCF for a detailed obligation free quote.