Myfleet Finance Lease

A Myfleet Finance Lease is designed mostly for the small to medium business as a way to ultimately purchase and own a car based on a fixed term payment arrangement followed by a lump sum payment at lease end. It is very similar to the traditional CHP (Commercial hire purchase) arrangement but has some benefits with GST and general company tax claims.

What is Finance Lease?

Myfleet can provide a finance lease to anyone seeking to lease or buy a new passenger vehicle, light commercial or general plant and equipment. It requires a simple application process, customer chooses the vehicle or item of equipment required then Myfleet arranges the purchase and payment on their behalf.

A lease period is typically between 36 and 60 months with equal monthly payments and a lump sum payout (residual payout) at lease end. This type of product saves on cash flow throughout the usable life of the leased items.

The market value of the leased items at lease end is typically more than the residual payout so the leased items can be sold and the lease payout amount recovered. GST on the new vehicle or equipment is claimed back by Myfleet and not factored into the lease costs, GST on the lease payments are claimed back by the lessee. Lease payments are completely tax deductible (although passenger vehicles must be under the depreciation limit).

The finance lease can also be easily combined with a budget for all the operating costs of fuel, maintenance, tyre, registration and insurance costs effectively making it a fully maintained finance lease.

Features and Benefits of a Finance Lease

  • Fixed monthly payments for the duration of the lease
  • Full tax deductibility of the lease payments (subject to depreciation limits)
  • Significant cash flow benefits against cost of full ownership
  • Can easily be coupled with Myfleet budgeted fleet management to make it a fully maintained lease arrangement

Will a Finance Lease suit me?

Finance leasing is typically suitable for companies, partnerships, sole traders and individuals where the leased vehicle is used for income-producing purposes.

Tax implications of a Finance Lease?

GST is charged on the monthly lease rental and on the residual value at the end of the lease.

Customers registered for GST can claim an appropriate percentage of the GST contained in the lease rental and the residual value.

If the financed amount is below the depreciation limit, a customer can claim the lease rental (relative to the percentage of business use) as a tax deduction.

If the financed amount is above the depreciation limit, interest charges on the lease and depreciation up to the value of the depreciation limit can be claimed.

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