With financial leasing, you only pay for the use of the car

The monthly lease payments are fixed, so a financial lease is an easy way of getting a car without needing any other collateral.

Financial leasing means renting vehicles, and your company only pays to use the vehicles. The lease does not include servicing. Financial leases include an agreed residual value for which the customer is liable. After the contract term, the car is usually sold to a dealership, a company or an individual. If the sales price is higher than the residual value, the difference is returned to the customer. If the sales price is lower, the customer is charged for the difference. Therefore, your company could benefit from using financial leasing if the residual value of the car is higher than anticipated. 

Features of financial leases:

  • Long-term 2–5-year lease agreement for a new car
  • Car serves as the collateral
  • Initial deposit is 10–20% of the price of the new car
  • Fixed monthly lease payments, excluding servicing
  • No kilometre restrictions
  • Customer is liable for the residual value on the expiry of the agreement
  • The difference between the sales price and the residual value is refunded to the customer or the negative difference is charged to the customer.

Benefits of financial leasing for your company:

  • Your capital is not tied up to owning the car – you only pay for the use.
  • The leased car is an off-balance-sheet arrangement and the lease payments are booked as expenses.
  • You are free to choose the make, model and vendor of the car. 

What type of company is financial leasing suitable for?

Financial leasing is an excellent option for companies that need to replace their car fleet regularly and do not want to tie up their assets in cars for three or four years. 

Financial leasing is suitable for all sectors that want to spread the costs of the company’s motoring and do not want to tie up their assets in cars. Financial leasing also enables the car fleet to be updated regularly. In many cases, no collateral is required for financial leases because the car secures the financing. 

Selling the car at the end of the lease

When the lease agreement is about to expire, you can ask our customer service team to extend it or sell the car to a dealership, a company or an individual. 

Are you interested in another form of car finance?

If financial leasing is not a suitable option, find out about our full-service leasing service and hire-purchase financing. Our service range is sure to include a form of financing that suits your company’s needs.