Leasing

Novated Leasing

Chattel Mortgage

Hire Purchase

 

 

 

 

Asset Finance Solutions

Fund equipment or vehicles for your Business / Personal use straight away

At Customers First Mortgages & Insurance, we can arrange for Asset financing for the purchase of plant and equipment used in business production such as Motor Vehicles, Manufacturing Plant, Office Equipment, Materials Handling and Earth Moving Equipment.

We can also arrange Consumer Finance contracts for your personal use.

 

 

 

Comparing Asset Finance Options

The following table provides a snapshot of the taxation, depreciation and GST considerations for each of the available finance options

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

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

Compare Leasing Novated Leasing Chattel Mortgage Hire Purchase Consumer Finance
Ownership Financier is the owner and retains ownership of the vehicle/equipment at the end of the leasing term when various options can be negotiated. Financier is the owner and retains ownership of the vehicle at the end of the leasing term when various options can be negotiated Client retains title to the goods however the financier holds a charge (encumbrance) over the goods until the final payment is received. Financier is the owner for the term of the agreement. Ownership is then automatically transferred to the Hirer when the final payment is made. Client retains title to the goods however the financier holds a charge (encumbrance) over the goods until the final payment is received.

 

Product is regulated under the National Consumer Credit Protection (NCCP) Act.

Tax All payments (excluding GST) are usually tax deductible when the vehicle/equipment is used for business use (subject to current tax law). Payments are made by employee usually as a salary sacrifice therefore reducing taxable income and quite often tax brackets. Depreciation and interest components are usually tax deductible (subject to eligibility and current tax law). Depreciation and interest components are usually tax deductible (subject to eligibility and current tax law). Product is designed for personal use and not business, therefore tax deductibility is not permitted for private purchases.
Amount Financed The invoiced amount less GST, as the financier is entitled to claim the Input Tax Credit (ITC).
Motor Vehicles are subject to a Luxury Limit of $57,009 therefore the maximum entitled ITC is $5,182 regardless of cost over this amount.
The invoiced amount less GST, as the financier is entitled to claim the Input Tax Credit (ITC).
Motor Vehicles are subject to a Luxury Limit of $57,009 therefore the maximum entitled ITC is $5,182 regardless of cost over this amount
100% of the invoiced amount but deposits can be made to reduce the amount owing on the equipment.

 

Motor Vehicles are subject to a Luxury Limit of $57,009 therefore the maximum entitled ITC is $5,182 regardless of cost over this amount

100% of the invoiced amount but deposits can be made to reduce the amount owing on the equipment.

 

Motor Vehicles are subject to a Luxury Limit of $57,009 therefore the maximum entitled ITC is $5,182 regardless of cost over this amount.

100% of the invoiced amount but deposits can be made to reduce the amount owing on the equipment.
Residual Value At the end of the term the financier by convention offers the Lessee a number of options. Usually this includes either payment of the residual plus GST, return the goods to the financier (the lessee is responsible for any shortfall after disposal of the asset) or if available, refinance the remaining balance for an additional term. At the end of the term the financier by convention offers the Lessee a number of options. Usually this includes either payment of the residual plus GST, return the goods to the financier (the lessee is responsible for any shortfall after disposal of the asset) or if available, refinance the remaining balance for an additional term. Ownership is retained by the borrower and any encumbrance is lifted when the final payment is made. Ownership is transferred to the Hirer when the final payment (balloon) is made. Alternatively you may prefer (if available) to refinance the remaining balloon for an additional term. Not Applicable. Ownership is retained by the borrower and any encumbrance is lifted when the final payment is made.
GST Issue The amount financed is the total purchase price less GST.

 

The monthly repayments are including GST and are claimed on your monthly or quarterly BAS (if entitled and eligible). The Residual Value also attracts GST.

The amount financed is excluding GST which is claimed as a tax credit by the financier. GST on the instalments is paid by the employer (whilst the Novation agreement is in place) which in turn claims them back directly on the business BAS statement. The Borrower as the owner and purchaser of the equipment is entitled to claim the ITC on their next BAS. This is subject to being ABN registered, the business use percentage and if the goods are a motor vehicle, is up to a maximum ITC of $5,182 Hirer can claim ITC on the purchase of the goods (only if ABN registered and entitled), is subject to business use percentage and if the goods are a motor vehicle, up to a maximum ITC of $5,182. This can be claimed either monthly or up front on your next BAS. GST Input Tax Credit is not available when items are for personal use.
Conclusion As the GST is claimed by the financier and passed on to the lessee, interest is not being paid on the GST portion of the purchase.

 

For a business this is the cheapest and most cost effective form of commercial lending. This contract has a constant tax claim over the term easing the accounting burden for smaller businesses.

Whilst repayments are made by the employee via salary sacrifice the savings on taxable income together with the amount financed being less GST, makes a Novated Lease as an attractive option for most employees.

 

Note that this transaction may be subject to FBT which is calculated on the cost of the vehicle and the estimated mileage. When considering this option, the vehicle should be used for a minimum of 15,000 klm’s per annum. FBT can also be minimised if you are an employee of a religious organisation or a hospital employee.

This contract is ideally suited to sole traders or partnerships and companies wanting to claim the GST up front (on a Cash Accounting Method).

 

As owner for tax purposes, depreciation and interest can be claimed, if entitled. Stamp duty is payable up front on this contract.

This contract type is ideal for individuals on car allowance or companies on Accrual Accounting Method (who are entitled to claim the GST up front).

 

For tax purposes this contract is claimed as depreciation and interest over the term of the loan and is subject to eligibility and business usage. Stamp duty is included in the payments and GST is payable on the Stamp Duty only.

Product is designed for personal use items and is best suited to PAYG employed applicants. See Novated Leasing options for Motor Vehicles.

 

Contact our Credit Advisors for assistance!

Just call us on 1300 275 536