InterPrac Leasing Newsletter-February 2008

  
 

Dear Member
The vehicle industry is dramatically changing to the point where manufacturers are coming up with new models each year and flooding the market with second hand vehicles. This is creating headaches for the business community when trading in vehicles as they can face large shortfalls. More recently we have seen situations whereby businesses have had to pay additional cash to meet the requirement of a payout figure on a trade-in in order to purchase a new vehicle. We can only foresee that these situations will only become more common.

Case study:
A business borrows $40k for a UTE over 60 months with a residual of 30% or $12k, the repayments are $689 a month. The comparison to a similar term and 0% residual the monthly repayments are $842. The difference is $153 a month or approx $35 a week. Often when businesses are take the second option they can find that when it is time to upgrade (generally at 36 months) that there is obviously no shortfall.

A possible solution
What can a business do in order to avoid the above situations - minimize costs and receive maximum tax deductions.

Operating Lease: (NO RESIDUAL AT THE END TO WORRY ABOUT)
An Operating Lease is a flexible option which allows an ABN holder to lease the vehicle that they require for an agreed term with a fixed rental per month. At the end of the term the client simply returns the vehicle to the provider hassle free (terms and conditions apply). The client can then elect for a new vehicle and start a new operating lease.

Benefits:

  • a vehicle can be outsourced for the ABN holder or choose the dealer they wish to trade with

  • One fixed rental price per month

  • The rental fully tax deductible

  • There is no residual or trade-in issues at the end of the term

  • Operating leases can also be offered as 'fully maintained' where all running costs are included in one fixed rental payment per month (registration, insurance, maintenance, tyres, fuel ..etc).

  • Full FBT or Organisational reporting

Many businesses are taking this option simply because of the hassle free transaction and its tax deductions benefits. Many other solutions can be tailored around the needs of your clients. For more details call our Leasing department on 1800 700 666 for more details.


For more details please contact our Vehicle and Equipment Finance Department on 1800 700 666 or visit www.interprac.com.au.

Yours sincerely

Djamel Chettibi
National Leasing Manager
 InterPrac Finance Services Pty Ltd
Ph: 1800 700 666
Fax: 1300 361 587
www.interprac.com.au