All vehicle leases managed by VicFleet are financed via a loan agreement with the Treasury Corporation of Victoria. Under this arrangement VicFleet is the lessor and eligible government departments and agencies are structured as lessees.
As finance leases, all the risks and benefits of ownership reside with the client and are subsequently reported on the client's balance sheet.
Under current government policy, the standard lease term is 36 months or 60 000 kilometres - whichever occurs first.
VicFleet leases are based on a fixed whole-of-life rental budget, which involves forecasting all predictable lease costs connected with ownership and usage of the vehicle. For certain clients, some of the operating costs have been removed and are managed directly by the client.
On a monthly basis, VicFleet raises an invoice or credit note for each client for the difference between what was billed and incurred for all vehicles sold. At the end of the vehicle's lease, VicFleet calculates any final adjustments.
Under this vehicle leasing arrangement, VicFleet is responsible for:
Vehicle lease rates are set on a cost-recovery basis.
Lease rates are set to reflect all predictable costs, including depreciation, fuel, servicing and disposal costs, and also include a nominal administration charge.
On disposal of the vehicle, all actual costs are added up and applied to the lease payment made to establish a profit or loss on sale.
This is borne by the department or agency.
The lease term is the period over which the vehicle is to be leased. Generally, vehicles must be retained for three years or 60 000km, whichever occurs first.
The correct lease term for a particular vehicle relates to the number of months within which the vehicle is expected to travel its maximum kilometres.
For example, a pool vehicle which is expected to travel 60,000 kilometres per year would have a lease term of 12 months - this should align with the number of monthly rental collections. Early or late return may impact on the profit or loss on sale.
Special rental terms for non-standard vehicles and equipment can be arranged through VicFleet.