Car & Ute Finance

Personal Car Loan

What is a car lease?

Otherwise known as a finance lease, if you’re using your vehicle mainly for business purposes, a car lease effectively works like a long-term rental.

Personal Car Loan

How does a car lease work?

The lender purchases the vehicle on your behalf, and then leases it back to you. You’ll pay a fixed monthly lease rental for the term of the lease.

When the lease comes to an end, you’ll be given the option to purchase the vehicle by paying a final lump sum (the residual value) directly to the finance company, restart another lease to pay off the remaining balance on the vehicle or trade the vehicle in.

Personal Car Loan Application
What else do I need to know?
  • Flexible contract terms ranging from 12 to 60 months (one to five years)
  • A residual can be applied to a lease, lowering monthly payments
  • Fixed interest rate and monthly lease rentals
  • As the GST contained in the car’s purchase price may be claimed back by the lender, only the vehicle’s price exclusive of GST is financed, lowering monthly payments*

* Please refer to your accountant for eligibility.

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Any calculation made using this repayments calculator is intended for illustrative purposes only. The calculator does not take establishment fees, stamp duty, or other government charges into account. Any calculations made should not be relied upon for the purposes of deciding whether to apply for a loan.

Common questions about a car lease

If you’re using a vehicle for business purposes more than 50% of the time but you’re unable or don’t want a chattel mortgage or commercial hire purchase, a car lease may be right for you.

A car lease may also be a good option for employees who are able to include their vehicle as part of a salary sacrifice scheme via a novated lease.

Other options to consider if you’re looking to finance your vehicle include a chattel mortgage and a commercial hire purchase.

To discuss your individual needs in detail and secure a finance option that’s right for you, speak to one of the Stratton Finance team on 1300 787 288.

If you decide you want to buy your vehicle at the end of the car lease, this is technically treated as the finance company selling the vehicle to you. You’ll pay an amount equal to the remaining balance on the car – the Residual Value – plus GST.

Businesses registered for GST will be able to claim an Input Tax Credit for any GST paid as part of the purchase.

There is potential to claim tax deductions on your car lease depending on the depreciation limit set, speak to your accountant for more information.