Novated Leases can save you money – Let us help you
Car Loan World specialises in finding the right novated lease. We have helped 100’s of businesses and individuals find the best novated lease for their needs. We have an expertly trained team of understanding finance consultants to help find you a novated lease at competitive interest rates no matter what your situation.
About Novated Leases
A novated lease is a form of salary packaging that can benefit both the borrower and the borrower’s employer. When you take out a novated lease, you are making an agreement with both the lender and your employer – unlike a standard car loan where the agreement is only between you and the lender.
Repayments for a novated lease are taken directly out of your pre-tax salary. That means the lease is in your name, but your employer agrees to take on the financial obligations of the lease. Once the lease has been paid off in full, you can take full ownership of the car (but bear in mind, there may be a residual amount left to pay).
The novated lease is portable. If your employment ceases, the novation also ceases, and all financial obligations for the car loan are passed to you. If this happens, you can choose to take on a standard car loan to pay off the rest of the amount owed, you can pay it off in full, or you can transfer it to a new novated lease with your new employer.
Split Full Novated Lease
The split full novated lease is similar to the full novated lease, but unlike with the full novated lease, the split full novated lease holder is responsible for the residual value of the vehicle being leased.
Fully Maintained Novated Lease
A fully maintained novated lease is a type of full novated lease that includes all of the car’s additional costs, such as insurance, registration, servicing and fuel costs.
Partial Novated Lease
A partial novated lease is an agreement either between a finance company and an employee, or between an employer and employee. The most common type of partial novated lease is one where the employer subleases the car to the employee, who takes over repayments instead of paying a subleasing fee.
Features and benefits
Benefits for you:
- Range of flexible options
- Lease is portable
- Tax benefits
Benefits for your employer:
- Reduce Risk
- Reduced administration time and costs
- More efficient than company car scheme
Important Factors
to Keep in Mind
If you choose to take out a novated lease, you will be rewarded with a large amount of flexibility. You can choose the car you want, and you can choose the lease period that suits you (usually between 12 and 60 months). As the lease has a fixed rate, you will also know what your repayments will be each month, making it easier to budget.
While the agreement exists between you and your employer, you are the one that retains the equity in the car. And even though your employer agrees to take on the financial obligation of the lease – remember, the risk is still yours. However, you are not tied to your employer just because of the lease – if you move to another job or leave the company, you take the lease with you.
On top of that are the tax benefits associated with novated leases. First up, you pay off the lease with pre-tax dollars, which means a lot less tax taken off your actual salary. If you choose to take ownership of the car at the end of the lease, you may benefit from reduced GST on any residual amount left to pay. You may also be able to claim tax deductions if you use the car for business purposes.