Car Novated Leases

Novated Leases

What is a novated lease?

• A three way agreement between the employee, employer and financier.
• Obligations under the employee’s car lease are transferred from employee to the employer through a Deed of Novation.
• Payroll deductions are made to cover these obligations in pre-tax dollars from the employee’s salary. The deductions cover lease payments and running expenses. The pre-tax payments lower the employee’s taxable income. This means the tax deducted from the employee’s salary is reduced.
• Also, GST incurred in vehicle running expenses may be recouped though the employer.
• The employee pays out any obligations remaining at the end of the lease, or if employment ceases during the lease.

How does a Novated Lease save me money?

• Income tax savings – part of the vehicle leasing and running costs are paid using pre-tax dollars.

GST SAVINGS

• Purchase Price – The amount financed excludes GST that is normally payable when purchasing a car.
• GST on finance payments and running costs (including fuel, maintenance, repairs, tyres and scheduled servicing) are recovered and credited back to the employee’s salary sacrifice account.

A novated lease transaction receives concessional FBT treatment under salary sacrifice. Care is needed prior to entering into a novated lease, that the FBT implications and lease terms are understood. The benefit of experienced Advisors is that they can explain in detail, all of the issues and potential issues with a novated lease. A novated lease can be a very cost-effective way to own and operate a motor vehicle.

Fuel card(s) will be issued to the employee for their convenience.

What are my Novated Lease Options?

Buying a car through a novated leasing arrangement does not restrict or reduce your options. You can:

• Choose a car that suits your lifestyle and budget
• Choose a new or a used car or
• One of our Advisers can arrange a ‘sale and leaseback’ on the car you are driving now.
• Lease terms from 12 to 60 months.

Car Pricing Service - something for free!

Our goal for clients is to ensure that when a client packages a novated lease the car purchase price is as cheap as it can be. Whether the client uses our price or merely uses the price to negotiate a better deal themselves is irrelevant. It is simply the best price that can be negotiated regardless. Having said that, we have a dealer network that readily and competitively prices vehicles for our clients.