Novated Lease

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Novated Lease

A novated lease works like this:

  • You choose a car and lease it from a finance company.
  • You novate the lease to your employer. Your employer assumes all the your rights and obligations under the lease, including responsibility of meeting the lease rentals.
  • The contract is in your name and you remain the registered owner throughout the lease and keep effective control of the vehicle at all times.
  • If you leave the company, you keep the car. In most cases, you would take over the lease payments, or get your new employer to take over the payments.

Fully Maintained Novated Lease

A fully maintained novated Lease generally includes all of the operating costs, such as fuel, lease rental, servicing and maintenance, registration, tyres and insurance. All of these items are covered by a single monthly payment. The amount is initially calculated based on a budget. Each month (or quarter) the actual expenses are tracked against the budget, and the budget is then adjusted if required.

Salary Packaging

Salary Packaging is an Australian Taxation Office approved means of allowing your employees to effectively restructure their income. As an employee, you can choose to receive your salary as a combination of cash and approved benefits. These benefits are either tax free or taxed at concessional rates. Replacing some of your cash salary with benefits enables you to lower your taxable income to increase your overall after-tax pay.

The Right Salary Packaging

It is very important that you salary package your car correctly. Getting the right advice regarding the size of the residual and the term can make the difference between saving and losing money! If you are considering salary packaging and/or a novated lease, we can help you. Either as part of the process of pricing your new car, used car or if you’re looking for pre-approved finance. We are also more than happy to work with your existing salary packaging company. Some of these are very focused on the financial aspects of the purchase and not so good at getting the best price for the car itself. We regularly get clients that are using some of the largest salary packaging providers in Australia and manage to save them significant amounts on the car purchase.

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