The difference is primarily an accounting one, and the choice to use one or the other depends on your business needs. These are the key differences:
Ownership: In a Finance Lease, the property is transferred at the end of the lease term from the financier to your business. In an Operating Lease, the financier retains ownership during and after the lease.
Residuals & Balloons: With a Finance Lease the RV is set by the ATO and at the end of the term the RV becomes the responsibility of the customer to either payout, trade-in or refinance.
With an Operating Lease the RV is set by the financier, and at the end of the term the vehicle is returned to the dealership and inspected. Once the vehicle passes inspection the customer is then able to finance a new vehicle. If the vehicle has damages outside of the Wear and Tear Guide the customer may be billed for damages.
Running Costs: Finance Leases generally do not include the running costs of a vehicle unless recharged, while Operating Leases can include all services and maintenance in the one monthly payment, which is calculated through the average kilometres travelled each year and the term of the loan chosen.
Accounting: Vehicles on a Finance Lease are included as an asset to the company, whereas those on an Operating Lease are off balance sheet funding and don’t not show up on your balance sheet as asset or liability.