Conventional Leasing

The asset is owned by the financier until they transfer the ownership to you unless you dispose of it before the end of the contract term . You pay a monthly payment to which GST is added and you claim the monthly payment as an expense for your business each year. A lease can have a $0 balance owed at the end of the term or  a “Balloon payment or Residual” which can be financed or paid by trading out of the asset and acquiring an new asset.

Novated Leases

This can be an effective way of rewarding employees where they are allowed, for example, to acquire a new vehicle while working for you and should they leave the responsibility for the lease payments goes with them