What is the difference between a financial lease and a novated lease

What is the difference between a financial lease and a novated lease Introduction: The World of Vehicle Leasing Hello everyone! Welcome to today's video, where we'll be exploring the world of vehicle leasing. When it comes to financing a vehicle, there are numerous options available, each with its own set of advantages and considerations. Two popular choices are financial leases and novated leases. While they may seem similar at first, there are some fundamental differences that can significantly impact your overall experience. So, let's dive in and understand the nuances of these two lease types. Section 1: Financial Leases - A Closer Look To start off, let's focus on financial leases. A financial lease, also known as a capital lease, is a long-term lease agreement where the lessee (the person leasing the vehicle) assumes most of the responsibilities and risks associated with ownership. In a financial lease, the lessee typically makes regular lease payments, which are often structured to cover the vehicle's entire cost over the lease term. While the lessee doesn't technically own the vehicle during the lease period, they enjoy many of the benefits and responsibilities of ownership, such as maintenance and insurance. At the end of the lease term, the lessee may have the option to purchase the vehicle at a predetermined price, commonly known as the residual value. Section 2: Novated Leases - A Unique Arrangement