Question

Currently, some companies operating customers use financial leasing services to change their fleet. When dealing with the car company's corporate agent, outside of paying for the car purchase (mostly or entirely with finance lease capital), the finance lease customer must pay a premium for the insurance policy. motor vehicle. Is this control reasonable or not? Why yes / why not

Answer 1

Answer:

Explanation:

A finance lease transfers the risk of ownership to the individual without transferring legal ownership. You choose a residual value within the ATO’s specified range to suit you, and at the end of your lease, you can pay it out, extend your term or enter into a new agreement. Operating lease on the other hand, is an asset funding option for businesses that don’t want to take on the risk of selling the vehicle at the end of the lease.

Because they are both a form of lease, they have one thing in common. That is, the owner of the equipment (the lessor) provides to the user (the lessee) the authority to use the equipment and then returns it at the end of a set period.

The differences between the two are clear if we look at who the ownership remains with, who deals with the running and maintenance costs, and whether or not the vehicle can be purchased at the end of the lease term.

Here we will look at both leases and why they are so different: