OPERATING LEASE

Operating lease is a contract wherein the owner, called the Lessor, permits the user, called the Lessee, to use of an asset for a particular period which is shorter than the economic life of the asset without any transfer of ownership rights.

The Lessor gives the right to the Lessee in return for regular payments for an agreed period of time. Operating leases are considered a form of off-balance-sheet financing—meaning a leased asset and associated liabilities (i.e. future rent payments) are not included on a company's balance sheet.

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An operating lease is a short-term lease or contract in which the lessee agrees to rent an asset from the lessor and the lessor retains the rights of ownership. In other words, an operating lease is a lease that is less than one year in length and the lessor always maintains ownership of the leased asset. Operating leases are also cancellable unlike finance leases.

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Benefits The cost of administering a fleet of cars is high. Since operating leases include all running expenses, these are relatively low. The administration is not such a headache. The cost of administering a fleet of cars is high. Since operating leases include all running expenses, these are relatively low. The administration is not such a headache.

You can structure the lease according to your needs