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Car Lease Adelaide

Name: Car Lease Adelaide
Creator: Savvy
Published: 2020-12-16T19:54:05+10:30

If you’re a business in Adelaide or anywhere else in South Australia, see what car lease options could work for you with Savvy.

No obligation. It won't affect your credit score.

Written by , updated on May 23rd, 2024

If you’re looking for a vehicle for your Adelaide business, there are several options for you to choose from. Among the most popular arrangements are car leases, which allow use of a vehicle without the responsibilities of ownership. In Australia, there are two types of commercial car leases available: finance leases and operating leases.

For help finding the best car lease for your needs in Adelaide or anywhere else in South Australia, turn to Savvy. We’re partnered with leading car finance providers across the country and can compare lenders based on the unique needs of your business to find a car lease solution that suits. Get started with a free quote today!

How do finance leases work in Adelaide?

A finance lease is an arrangement where a business leases a car from a financier for a specified term – typically one to five years – with the intention of buying it. Payments cover lease costs but not maintenance and running expenses. At the end of the lease, the business can make a balloon or residual payment to acquire ownership of the car. Alternatively, they can choose to refinance the residual and keep leasing or trade the car in and start a new lease.

Finance leases are popular across many sectors of Australia’s business community, in part because of the goods and services tax (GST) savings on offer. If you are registered for GST, you can claim back some or all of the GST included in your lease payments as an input credit on your next Business Activity Statement (BAS). Furthermore, the lease rental may be tax deductible where the car is used for work purposes.

How do operating leases work in Adelaide?

Operating leases are essentially a type of long-term car rental. This arrangement is a fully maintained lease, meaning that all the running costs get bundled with the lease payments, with no administration your end. You also have the flexibility to upgrade or change vehicles regularly according to your needs. Like finance leases, operating leases usually last between one and five years, but at the end of the agreement there is no option to buy. Instead, the vehicle is returned to the lessor.

If you lease a vehicle under an operating lease agreement and use it for work purposes, you can claim tax deductions for various car expenses. These expenses can include repairs and servicing, fuel, insurance premiums, registration and depreciation. Additionally, if you are registered for GST, you may be eligible to claim GST credits.

Should I choose a finance lease or an operating lease in Adelaide?

Choosing between a finance lease and an operating lease in Adelaide depends on your business needs, financial goals and how you intend to use the vehicle. Here’s how the two compare:

	Operating lease	Finance lease
Ownership	Lessor retains ownership throughout lease term	Lessor retains ownership until end of term
Option to buy	No option to buy at end of lease term	Option to buy at end of lease term
Term length	1–5 years	1–5 years
Maintenance	Typically included in lease agreement	Lessee responsible for maintenance costs
Payment	Fixed payments covering lease period	Fixed payments covering lease period
Mileage limits	Yes, many leases set a maximum number of kilometres per year	Yes, many leases set a maximum number of kilometres per year
Balloon payment (residual value)	No	Yes, if lessee chooses to buy car

Here are some key points to consider:

Running costs: an operating lease includes all car registration, insurance and running costs in one payment, whereas with a finance lease the lessee is responsible for these extra payments.
Long-term use and ownership: consider how you want to use the vehicle. If you intend to use the asset for a long time and eventually want to own it, opt for a finance lease.
Asset flexibility: if you need the flexibility to update or change assets frequently, choose an operating lease.
Maintenance requirements: a fully maintained operating lease can offer convenience and reduce your administrative burden – this can be especially useful if you have a fleet of several vehicles. However, a finance lease gives you the freedom to choose your own insurance and servicing.

What are some alternatives to car leases in Adelaide?

Chattel mortgage: a chattel mortgage is essentially a business car loan where the car is used as security. Unlike a car lease, with a chattel mortgage the car is owned from the start. This arrangement can offer both tax and GST benefits:

You get to claim all GST on the purchase price back as soon as you next file a BAS.
There’s no GST on the residual or repayments.
The interest on payments is tax-deductible.
You can claim depreciation as per Australian Tax Office guidelines.

Novated lease: a novated lease is a car financing option for employees, enabling them to salary package a vehicle through their employer. The employee can use the leased car for both personal and work purposes throughout the lease term. At the end of the term, the employee has the option to pay the residual value and take ownership of the car.

Car loan: if your employer doesn’t offer novated leasing through salary sacrifice, you could consider taking out a traditional car loan as a private buyer. They’re secured finance, meaning your car is used as collateral, helping to keep interest rates relatively low. If you’re looking for a car loan, Savvy’s team of experienced car loan brokers can help you compare and find a deal tailored to your needs.

Hire purchase agreement: a hire purchase agreement is a financing arrangement where an asset is rented for a set period, usually with the option to buy the asset at the end. During this rental period, the borrower makes regular payments to the lender, which typically cover both interest and a portion of the principal. After all payments are completed, ownership of the asset is transferred to the borrower.

Why choose Savvy for your car lease?

Reputable lenders

Savvy partners with a larger panel of specialist vehicle finance lenders so you can access more products and lower prices.

Experienced, friendly brokers

Savvy’s expert consultants work hard on your behalf to source the optimal car finance solution to match your aims and needs.

Seamless, convenient process

Fewer delays and more lenders all in one place. Discover significant tax and GST savings and get more competitive interest rates.

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Frequently asked questions about car leases in Adelaide

What are my bad credit car lease options?

It’s challenging to get a competitive car lease if you’ve got bad credit as lenders operate based on risk. A poor credit history typically limits your options and means high car lease interest rates if approved. Because of the risk element, it’s often better to look past car leases and consider secured car loans or chattel mortgage finance as both methods use your vehicle as collateral. If you want to explore your options, Savvy works with a range of lenders that offer competitive bad credit car finance.

What’s a residual value?

The residual value is the estimated value of the car at the end of the lease term. With a car lease, the residual gets set according to ATO rules and it’s based on the term of the lease. It accounts for the vehicle’s depreciation during the term.

Can I lease a car if my financials aren’t up to date?

If you’re waiting on your latest tax return or other financial records, Savvy’s consultants will likely direct you toward a low doc car finance solution, which is usually based on the chattel mortgage model and itself comes with some excellent tax advantages.

Why should I use a car finance broker?

Apart from the obvious advantage of canvasing a broader selection of lenders and products, Savvy’s expert car finance consultants can guide you through the car lease process, help with documentation and qualification requirements, and generally navigate applications more quickly. That means you jump fewer hoops and end up with more time to do what really matters– which is develop your business.