If you're on the hunt for a new vehicle but unsure if a novated lease is right for you, you're in the right place. We're breaking down the top six benefits of a novated lease to help you make an informed decision.
But first, let’s define what a novated lease is. It’s a three-way agreement between you, your financier, and your employer. We team up with you to set up finance and running costs (like insurance, fuel, etc.) to be deducted from your pre-tax salary. And at the end of the lease, the decision of whether to buy, sell, or upgrade the car is all yours. It’s a tax-effective way to finance a car and also known as “salary sacrificing” or “salary packaging.”
Now, let's dive into why a novated lease is such a great option:
- Wide Range of Vehicle Options: You have plenty of options to choose from, new and used vehicles can both be purchased via a novated lease.
- Savings: You can save on income tax and GST, putting more money in your pocket. According to our research, this creates an average saving of $5,188 per year for novated leases compared to traditional car financing.
- Treat the Car as Your Own: The car is your personal asset, so there are no restrictions on how you use it and at the end of the term you have the choice to refinance or pay out the residual, and sell, upgrade, or own the vehicle!
- Transportable: If you change jobs, the lease can potentially be moved over to your new employer, as long as they offer novated lease deductions through payroll.
- Simple Payments: The regular payments for running costs are deducted from your salary, making budgeting and financial planning easy.
Want to know more about novated leasing and calculate your savings?
Give us a call on 08 8980 5799.
