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FAQ: What is the definition of a Car Lease (Finance Lease), and how do they work?

What is the definition of a Car Lease (Finance Lease), and how do they work?

A Finance Lease or Car Lease is a commercial finance product.

Under a Car Lease, the financier purchases a car on behalf of the customer, and then leases the vehicle to the customer in return for monthly rental payments.

At the end of the term (length) of the lease, the financier gives the customer the option to purchase the vehicle in return for a final installment (residual value).

Alternatively, the customer may choose to "trade in" the vehicle, or re-finance the residual and continue the lease.

Please note that this information is of a general nature only. You should consult an accountant to obtain information specific to your situation.

Further Reading:

Next Question in Car Lease (Finance Lease) FAQs:
What are a Car Lease's (Finance Lease) features and & benefits?

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This page was printed from the stratton website.

Original URL: http://www.strattonfinance.com.au/car-finance/learn/faq/car-lease/what-is.aspx

stratton offers finance and insurance for cars, properties, equipment and more. Visit us online at http://www.strattonfinance.com.au, or call 1300 STRATTON (1300 787 288).

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