What you should know about Novated Leases
If you were thinking about the best way to buy a new car, it would be a good idea to consider Novated lease. Traditionally, new car purchasing usually involves two parties, which is the seller and the buyer. However, if you introduce your employer into the car buying relationship, you are likely to save a fortune. Novated lease is also known as salary packaging is a tax-effective agreement between your employer, finance company and you. It allows you to lease the vehicle of your choice and you do not need to have an executive salary.
By entering into a Novated lease, it means that your employer has accepted to pay for your car lease payments from your pre-tax salary. For your information, a regular loan is usually paid from your post-tax salary, which means it is deducted from whatever remains in your bank after tax. If your employers offer Novated lease as a benefit, it gives you an opportunity to choose the vehicle you wish to drive without any restrictions that are common to company fleet.
How Novated lease work
In a typical Novated lease agreement, you can pay for two to five years after which can decide to trade in your car for a newer model through a new lease. If you are stuck with a car loan and a Stratton Novated Lease consider the fact that a regular loan will have to be paid using your post-tax salary. It means that a Novated lease helps you to lower your taxable income.
A Novated lease is not the same as renting a car. A Novated lease must involve you, your employer and the fleet provider. The best thing with Novated lease is that your vehicle running expenses are usually taken from the pre-tax salary. You can choose to lease a new or used car and select a lease term that can provide suite well to your budget.
What is included in the Novated Lease?
Through a Novated lease, you will have an opportunity to choose a car that suits your needs and can help you get the most attractive price on a network of suppliers. Novated lease also allows you to have a lease plan fuel car, which enables you to have cashless driving. This is because all your fuel is usually covered in your payments.
Your vehicle servicing is also part of the monthly payment. It gives you an opportunity to have your car checked by authorized and qualified mechanics to make sure that all the repair and maintenance is done at a reasonable price.