A good novated lease provider will be transparent about fees from the outset, and they should also offer access to wholesale fleet pricing, which could save you a bundle.
Unlike car loans, novated leasing allows you to pay for your vehicle and running costs using pre-tax income. However, there are still some nuances to the system. For the best novated lease, check this out!
Taxes
Novated leasing, also known as salary sacrifice, enables employees to pay for their car using pre-tax dollars, which reduces taxable income. It also means that you save GST on the vehicle’s purchase price and all ongoing running costs such as fuel, servicing, tyres, registration and insurance.
A good novated lease company should be transparent about all fees upfront. Generally, these are fair and low compared to the tax savings you’ll access.
The other considerable saving is no Fringe Benefits Tax (FBT) liability if you choose an EV or PHEV. It is an excellent incentive for anyone wanting to drive green vehicles.
Fuel
A good novated lease can help you pay less for fuel, tyres and maintenance. It is because novated leasing companies can bundle these costs into your fixed monthly payments.
Every March, Fleet News Group surveys Australia’s leading innovative lease providers to find the most popular vehicles with their clients. The results are compiled to provide an alternative new car sales leaderboard for manufacturers, dealers and Fleet Managers.
Servicing
A novated lease company should not be able to restrict you in your choice of vehicle. It should be able to set the proper budget from the get-go and provide full explanations of what’s included in the leasing cost, for example, the kilometre allowance and any maintenance allowances you may need.
Usually, novated lease companies do not directly finance the lease but help you source and establish your salary-sacrifice car lease with a financier. It can involve advising you on which lender to approach, preparing and submitting the finance application on your behalf and setting up your lease contract with your employer.
Insurance
A novated lease is a tax-effective way to fund the car of your dreams. It also allows you to purchase new or used vehicles and is flexible enough to move with you if you change jobs.
An excellent new lease provider will take the time to talk with you about your circumstances and budgets. They will also ask many questions and explore the little things that can save money. And they won’t be pushy or hide costs in the fine print. They understand that novated leasing is still new and often confusing. They will be honest and upfront about everything.
Roadside Assistance
Having the right novated lease provider can make all the difference. They should allow you to include suppliers of your choice rather than try to force you into their preferred providers for things like insurance, servicing, tyres, and roadside assistance. For the best novated lease, check this out!
They also shouldn’t charge you a “finder’s fee” or markup on the interest rate (their go-between fees) and should offer non-exclusive arrangements with financiers. It allows them to keep their costs low and pass the savings on to you. A good novated lease calculator will give you an overall cost, including all these costs, allowing you to compare the options.
Rego
A good novated lease provider can help you choose the vehicle that best suits your current and future circumstances. They will also assist you in understanding your novated lease throughout its life.
Novated leasing allows you to bundle all your car expenses into one payment – including fuel or electricity, servicing and registration, tyres, insurance and on-the-road assistance. It can allow you to budget your costs more effectively.
Novated leasing is a more straightforward type of finance to administer than car loans. It can reduce the risk for financiers and lower your repayments. It can be a great way to buy the vehicle of your dreams and lower your tax bill. For the best novated lease, check this out!