A popular but often overlooked flexible lease option with no mileage limits or damage recharges.
Finance Lease is perfect for registered companies who want to handle the administration of their vehicles, and have the asset shown on their balance sheet.
A VAT-beneficial option where the hirer can choose to pay the entire cost over the agreed lease period, plus an interest charge, or pay lower monthly rentals during the lease period with a final payment based on the anticipated resale value of the vehicle.
- Finance Lease is a method of financing a vehicle that is usually favoured for commercial vehicles and by VAT registered businesses
- The business obtains the use of the vehicle by paying a rental each month
- The monthly rental is determined by the initial cost of the vehicle (excluding VAT), the period of the Finance Lease and the residual value (sometimes called the balloon payment), plus interest
- Although you never take ownership, at the end of the Finance Lease contract a Final Rental
- Usually this means that the vehicle is sold and a proportion of the proceeds of the sale are returned to the lessee (In LeasePlan’s case, the customer receives 98% of the sales proceeds whilst LeasePlan retain 2%