Operating Lease or Finance Lease?
From the customer's perspective, the desired period of use is decisive: Should the asset only be used for a defined period and then returned, or should it be used on a permanent basis with leasing serving purely as a financing instrument?
From the leasing company's perspective, the residual value, the residual value risk, and the remarketing options are the key considerations.
Choosing the right leasing structure is by no means just about the instalment amount and term. The real fork in the road comes down to what should happen at the end of the contract — and the question: Who bears the risk for the residual value of the asset?
In practice, two basic models can be distinguished:
🔹Operating Lease (Classic Rental Agreement): Here, the focus is purely on usage. The return of the asset at the end of the term is agreed from the outset — as is commonly known from fleet management, for example. The leasing company calculates the market value at the end of the usage period and bears the remarketing risk entirely on its own account.
🔹Finance Lease (Partial Amortisation with a Put Option as Security for the Financier): For many capital assets, the leasing company is unwilling to bear the residual value risk. The contractual solution: a put option. At the end of the term, the lessor has the right — but explicitly not the obligation — to sell the asset to the customer at the previously agreed residual value.
What does this mean for the customer?
Any customer planning to take ownership of the asset at the end of the term should make it a priority to negotiate the end-of-contract terms at the time of signing. Failing to clarify the lessor's actual behaviour at contract end in detail risks unpleasant surprises when it comes to the purchase price and asset transfer.
👉 Do you know how your lessor will act at the end of your existing lease contracts?
Let's talk!
Operating Lease or Finance Lease?
