| Author: Kirthy |
Purchase a car or just lease it out!
Gone are the times when the options of getting a new car were to either purchase it or wait for a company car. But, today,
one has a choice to either opt for car purchase or lease it out. There's a wide variety of loans ranging from traditional
bank loan to novated lease.
Lease a car and pay only for the use of car, on completion of the lease period, one can hand it back to the leaser, take out
another lease or even purchase the vehicle through a third party. Leasing out is a good option, if your employer is willing
to include a car as part of your salary package. Also get exempted from paying tax, especially for cars in the prestige or
luxury sector.
Lease finance can be classified into two broad categories:
Finance Lease or Operating lease and Novated lease are the two categories of Lease finance.
Finance lease are quite popular due to the fact that they have an ability to novate the lease. There's no deposit or
trade-ins involved in such lease. Monthly payments are made based on the lease term, interest on the finance charge and the
residual value of the car at the end of the term. A borrower may have to take risk on the residual amount, if the car is not
worth the amount three years later, he will have to make up the residual difference and finalise the contract. However, one
can take ownership, by refinancing the residual.
Another way out to have a car and get tax exemption is to go for novated lease. One can take out a standard finance lease on
a car of his choice. The employer can pay the employee's lease payments through a novation agreement which is valid till the
last working day. The lease payments to be made, running costs of the car used for an employee's private purpose will be
subjected to FBT(Fringe Benefit Tax). This FBT is calculated on the basis of the car value. The kilometers traveled annually
are covered by the pre-tax salary. If the employee resigns from the company, then the lease payments will be made by him and
not the company any more.
Get more information on your car loans and visit www.cheap-car-loan-uk.co.uk |
Author Bio:
content developer for finance sites |
| You can search for this article using: college loans, student loans, personal loans, home loans, bad credit loans, countrywide home loans |
|
