Novated Vehicle Lease
Novated lease finance is a fantastic option for salaried employees looking to buy a vehicle using their pre-tax salary.
You may have heard of novated lease finance, but could be feeling unsure about whether to opt for a novated lease, or to buy a car using a regular car lease or loan. There are many advantages associated with signing up for a novated lease agreement, for both employer and employee. Stick with Finance Monster and we’ll do everything we can to advise you on getting the best novated lease quote in Australia.
What is a Novated Vehicle Lease?
A novated lease allows salaried employees to buy a new vehicle using their pre-tax wages. It is a three-way agreement between an employee, employer and a lender, with the employer agreeing to take on the employee’s obligations under the lease. Novated leasing is also known as car salary packaging or salary sacrifice.
Novated Lease vs Cash – should I sign up for a Novated Lease or buy a regular Car Loan?
Many Aussies ask themselves “Which is better, novated lease vs cash loans for cars?” Here at Finance Monster, we feel that if a novated finance lease is available to you, you should go for that over getting a regular car loan. This is because of the huge benefits and tax savings involved. If you buy a car using your normal salary, you’ll pay more for it because you are purchasing it from income that has been taxed already. Do remember that there are also potential pitfalls associated with novated lease vehicles, so always research your options fully. If you are wondering what the tax benefits are? Speak to Tax Monster, they can help!
Why get a Novated Vehicle Lease?
There are plenty of reasons why a novated lease agreement can be a really great idea if you’re working, but are worried about the costs of buying a car. Getting a novated lease vehicle gives you flexibility and car security, without tying you into a traditional car purchase.
Use your pre-tax earnings
Buying your car using your BEFORE TAX salary means you end up paying LESS TAX overall on your salary, because your taxable amount is reduced. This means you have more cash to play with at the end of the month!
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Deduct operating costs from pre-tax earnings too
With a fully maintained novated lease, you can arrange for the following costs to be deducted from your pre-tax earnings as well as the cost of the car itself:
- Service and maintenance
- Registration and insurance
Use the vehicle for both work and personal use – choose a really nice car and impress your friends driving around town!
Save on GST
A novated lease vehicle is purchased and operated net of GST, providing a 10% saving. GST is not paid on:
- Vehicle purchase price (up to the luxury limit)
- Fuel purchases
- Service and maintenance
You don’t need to cough up 20% to get the car, like you would if you were getting a regular car loan. With a novated finance lease, you can be driving off in your new car straight away.
Flexible terms and conditions
With novated lease vehicles, you are never tied to your car. This means you can change your car whenever you want. Which is great if you’re fickle, or just enjoy trying out a new car every month!
Choose the car YOU want to drive
Rather than your employer choosing what car you drive around in, as would be the case if you were driving a company car, you can choose a vehicle that is better suited to your budget and lifestyle needs (please check your employer’s vehicle policy).
One car not enough? Add another set of wheels to your lease and enjoy the benefit of having more than one novated lease vehicles (always check with your employer first).
Free for employer
Novated lease finance does not cost your employer anything
Easy to manage
Pay off your lease in a pre-arranged monthly or fortnightly payment. No hassle!
Don’t feel tied down
Feel free to change jobs – if you start working at another company you can transfer the novated lease agreement to your new employer, or into your own name.
How can Finance Monster help?
Finance Monster is an experienced finance broker able to compare thousands of quotes from finance institutions throughout Australia. We can get great quotes for all sorts of loans, including personal loans, home loans and car loans. If you are a business or employee looking to gain information about getting a novated lease quote, just give us a call on 1300 668 222.
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