Finance Lease vs Operating Lease: Which Is Right for Your Business?
08 Nov 2022
The current economic environment presents challenges for individuals and businesses, impacted by the COVID-19 pandemic and rising living costs. Despite this, many are still looking to innovate and upgrade technology and vehicles. Key questions include whether to buy or rent and how to fund these purchases. This article explores these leasing options and provides insights into making informed financial decisions.
Finance Lease
Paying cash up front may appeal to some who are averse to a certain level of debt but is not necessarily the best utilisation of your own funds. As a general rule of thumb, any cash outflow should be matched against any income derived from the acquired asset to assist with future cash flow. A finance lease also referred to as a hire purchase, is a mechanism that allows you to purchase an asset by paying for it over installments rather than upfront. Once the obligations of the agreement have been met, ownership of the asset is then transferred to the purchaser.
On face value, this seems to be a valuable option to consider, you immediately gain all the benefits and values which the asset provides, given your payments are spread over time. However, based on the negotiated repayment terms, at the end of the agreement, you have likely paid more than what the asset is worth at the time of acquisition, considering the interest and any additional maintenance costs required during
Our Latest Insights
Pre 2026 Year-end Tax Call-Outs
As the 2026 financial year draws to a close, now is the time for New Zealand businesses to review key tax matters. From bad debts and ICA balances to FBT and KiwiSaver changes, proactive planning can help avoid surprises.
We are growing
Andersen announces the acquisition of David Han & Associates, strengthening its expertise and service offering through aligned values, expanded capability, and a shared commitment to trusted, personalised client relationships.
Crypto-focus: IRD Puts DeFi Cryptoasset Transactions Under the Tax Lens
Inland Revenue’s IRRUIP18 outlines its initial views on the New Zealand income tax treatment of DeFi transactions, signalling that wrapping, lending, staking and borrowing cryptoassets may trigger multiple taxable disposals.
2025 NZ Tax Recap for Businesses
Discover the essential tax changes for New Zealand businesses in 2025, including investment incentives, compliance updates, and upcoming Kiwisaver and FBT proposals. Prepare for 2026 with expert insights and practical reminders.