Operating Lease

Operating Lease

Operating Lease by Autojet Rent a Car

What is Operating Lease?
Operational leasing is a service that allows you to use a vehicle for a certain period of time (12-60 months) but without an option to acquire ownership. This type of service is preferred by companies that want to plan their costs through fixed monthly installments.

What are the advantages?
– Accounting for all costs related to the rented vehicle
– No additional maitainence cost
– Reducing the amount of your company`s taxes by monthly deduction of your companies`s lease payments
– Full technical support is provided, insurance and warrenty of the car
– No fleet management needed

What is the difference between Operating Lease and Finance Lease?

When we speak of Operatin Lease, the lesor (owner) of the vihicle transfers the right of use of the certaing vehicle for the period of the contract and agains paiment to the Leassee. All payments by the Lessee are treated as operating expenses at the income statement and expenditure. Also the Lease does not affect the balance sheet.
No rist of the property is taken, only the pleasure of using the car.

Finance Lease on the other hand is much more risk taking activity.
It is recognized as asset and liability in the balance sheet

It is important to designate that the Lessor can claim tax releif on leased asset only if it is under the Operating lease form.