Leasing terms made simple
A repayment of the outstanding principal sum made at the end of a loan period, interest only having been paid hitherto.
Car finance is a term used to describe the process of borrowing money to buy cars or other vehicles.
A car loan is money lent by the financer to the customer in order to purchase a vehicle.
A comparison rate is there to tell you the “true” cost of a loan so you can compare one lender with another. A comparison rate incorporates all of the upfront and ongoing fees into the repayments, not just the interest. A comparison rate is a legal requirement for all lenders.
A comparison rate takes into account all of the following:
- Loan term
- Loan amount
- Repayment frequency
- Fees and charges
- Interest rate
Remember. A comparison rate, while a good guide, does not necessarily tell you everything you need to know. This is because comparison rates can change depending on the size and term of the loan. Make sure you ask Jim.
EARLY TERMINATION FEE
A fee payable if the lease contract is ended before the agreed time.
EFFECTIVE INTEREST RATE
An effective interest rate seeks to explain the full cost of the loan, including fees, charges and payments specific to your loan’s size and term.
A fully maintained lease combines all of the vehicle’s running costs into one regular payment. These payments can include fuel, tyres, maintenance and registration.
Maintenance involves the general upkeep of the vehicle such as servicing, tyres, oil, and so on. It does not include accessories added after the commencement of the lease.
LUXURY CAR TAX
The Luxury Car Tax is a tax on vehicle purchases above $61, 884. The tax amounts to 33% of the GST on top of the vehicle cost. $61, 884 is the current, Australian Luxury Car Tax Threshold. The Luxury Car Tax threshold for fuel efficient vehicles is $75, 375.
In accounting, residual value is another name for salvage value, the remaining value of an asset after it has been fully depreciated. The residual value derives its calculation from a base price, calculated after depreciation.
SALE AND LEASEBACK
Sale and Leaseback means that the financer purchases a vehicle on the customer’s behalf and leases it back to the customer at an agreed rate.