Tag Archives: tax

How car leasing works

Car leasing is a popular alternative to borrowing to purchase a business car, but car leasing can be a great alternative for individuals too. Whether you want to purchase a car or just rent one for a while, car leasing could be the answer. Car leasing is basically renting a car, similar to leasing an office or house. When leasing a car, the finance company purchases the car of your choice. They then allow you to use the car for the term of the lease in return for a monthly payment.

If the vehicle is used solely for business purposes, the repayments made are completely tax deductible when car leasing. Car leasing involves paying the depreciation which becomes your tax deduction. The residual value is the depreciated asset price at the end of the term.

Benefits of car leasing

Some of the benefits of car leasing are:

Car leasing payments can be a tax deduction for business vehicles Car leasing enables you to change your car every few years Interest and monthly payments are fixed, so costs are known in advance Car leasing payments are often lower than a car loan The car is used as security against the lease, so interest rates are often lower than car loans Car leasing offers flexible terms from 2 – 5 years Car leasing can be used for either new or used vehicles.

Types of car leasing

There are three main types of car leasing

operating leases, finance leases and novated leases.

The main difference between operating and finance leases is at the end of the car leasing term. With an operating lease, the lender retains ownership of the car, whereas with finance leasing, you are responsible for the residual or balloon payment and you assume ownership. Options at the end of a finance lease are; pay out the balloon payment and keep the car, trade in the vehicle, or refinance the balloon payment with another lease or loan.

A fully maintained car lease is a finance lease that includes running costs of the car such as services, fuel, tyres etc. This type of car leasing is perfect if you need to have fixed costs each month.

Novated leasing works quite differently to operating and finance leasing. If you are an employee interested in leasing a car, you should consider novated leasing if you wish to salary package a car.

Who does car leasing suit?

Car leasing suits anyone who wants the latest car or whose business requires a car that is always new. Car leasing is possible for personal, business or mixed use cars, but car leasing is particularly useful for financing cars used solely for business purposes. Because car leasing payments are often lower than car loan repayments, car leasing is an attractive to anyone struggling to afford a car loan.

Applying for a car lease

360 Financial Services can help you choose the right car leasing option for you. For more information on car leasing, please contact 360 Financial Services or apply for a car lease online.

Computer Equipment Leasing- An Attractive Means of Acquisition

Living in the century that is tech savy and where technology changes so quickly that as soon you uncrate a brand-new computer or printer, it’s probably obsolete. To avoid obsolescence is just one of the many advantages to leasing. Computer equipment leasing is a very attractive means of acquisition with everybody in the business. It offers a simple and economical way for your company to keep up with the latest technological trends. Also buying new technology every time is not possible and you can soon run out of pocket. The alternative that works for everyone is equipment leasing.

You can always have the most up to date computer equipment with leasing and when the lease contract is over, better equipment can be leased again. Computer equipment leasing requires only a small initial investment. It is a great choice if you’re facing an urgent technology need and don’t have the cash on hand. You can have 100% finance for leasing with tax deductible plans. You will have fixed monthly payments that preserve your cash and bank lines. Technology graveyard has engulfed the companies these days. Somewhere down the line their property is filled with old hardware. With leasing, however, when the contract is up, you simply return the obsolete equipment to the vendor instead of storing it in your warehouse or back closet.

You should know four points before you choose equipment leasing:-

1.Know your computer needs and compare them with your financial status and projections in order understand the true costs of leasing. 2.Consult with a tax accountant or find information on your own for the tax implications of leasing. 3.Find and make a deal with a vendor who is willing to lease the equipment to you for the time you require it at a price you can afford and are willing to pay. 4.Before you sign the contract, know all the costs involved including the security and hidden costs. Your security amount should be mentioned in the lease contract as well as the terns under which it will be returned after the contract is over. Fill out the lease agreement form, sign it and get a copy of the signed agreement for your records.

Points to Remember

The equipment can become obsolete in just 3 or 4 years or sometimes before that also. You can easily expand the lease or replace the equipment in the mid of the contract. You does not owe the responsibility of the equipment. A better option to rent that has tax implications and other financing.

Search ans talk to several equipment leasing providers to compare prices and contract stipulations.