A customised operating lease gives you full use of an asset while allowing you to avoid many of the risks typically associated with ownership – such as depreciation in value, obsolescence and asset disposal.
How it Works:
The leasing company assumes the risk with regards to the residual value of the motor vehicle at the end of the lease. The rental payments for the operating lease are fixed for the term of the lease. The operating lease agreement will provide for a maximum number of kilometers that can be traveled by the motor vehicle during the lease term. If the maximum number of kilometers is exceeded by the lessee, an excess kilometer charge will be payable by the lessee to the leasing company.
The motor vehicle must be returned to the leasing company at the end of the lease in good order and condition. Depending on the type of repairs to be made to the motor vehicle upon return (if any), the lessee may be required to pay the cost of those repairs. The lessee has the option of choosing a fully maintained or non-maintained operating lease.
There are a number of benefits associated with operating leases, including:
The rental payments are fixed over the term of the lease.
The financier assumes the residual value risk on the vehicle.
The motor vehicle does not appear on the balance sheet.
Operating costs can be included in a single payment.