AFLA - Australian Fleet Lessors Association
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Brief Definitions

1. Operating Lease - Funding Only
The Financier offers an Operating Lease, with service or maintainence not included.

  • The monthly rental does not include service or maintenance
  • The customer is not aware of the residual
  • Residual risk remains with the lessor
  • Rentals are fixed


2. Operating Lease – Other
All operating leases other than (1) above, i.e. those including maintenance and other services.  These services include:

  • purchasing new and replacement vehicles
  • registering vehicles with the relevant vehicle registration authorities
  • maintenance cost control
  • paying tolls on roads
  • dealing with traffic infringement notices
  • organising fuel card suppliers, and managing the process of issuing new cards and retrieving old cards that are no longer required
  • roadside assistance programs
  • keeping up with regulations in areas such as workplace safety, and making sure that vehicles are compliant
  • selling cars when they have reached the end of their useful or economic life

 

3. Finance Lease
Finance leases are those where residual risk does not rest with the lessor. Finance leases do not usually incude maintainence or other services.

 

4. Novated Leases
A Finance or Operating Lease with the employer agreeing to meet the financial obligations of the lease.

  • Lease can be either fully maintained or non-maintained.
  • Employer is responsible for lease payments on behalf of the employee.
  • Employee is responsible for the residual value indemnity if it is a finance lease.


5. Fleet Managed
The provision of a range of fleet management services, however, the Fleet Manager does not fund the vehicle.

 

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