Standard Products
| Finance Leasing | |
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An agreement that provides the Lessee with all the risks and rewards of ownership but legal title in the equipment resides with the Lessor. Also referred to as a full-payout lease under which the Lessor seeks to recover the full equipment cost along with interest over the primary agreement term. |
| Operating Leasing | |
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A lease where the lessor takes some residual risk in the equipment i.e. where the residual value in the equipment at the end of the primary term and the disposal of the equipment is the lessors responsibility. Often treated as an Off Balance sheet agreement by the Lessee. |
| Contract Hire | |
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Essentially an operating lease, usually for vehicles or plant, which may be combined with a maintenance or fleet management contract. The lessor carries the residual risk and the rentals normally include a component for maintenance charges. |
| Hire Purchase | |
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is an agreement to hire an asset with an option to purchase at the end of the agreement. Full legal title in the equipment passes to the lessee upon payment of the rentals and the option to purchase fee. Under hire purchase agreements, capital allowances for tax purposes are claimed by the hirer rather than the lender. |