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5 Steps to novated lease success
A novated lease is the most cost effective way for Australian employees to purchase new motor vehicles. By using the financing from an external financier, as well as your employer, you can acquire a car at a noticeably less overall amount by the end of the lease term. By acquiring the car through your employer and then paying back the owing repayments on a regular schedule deducted from your wages, you are never in danger of missing a repayment and you will save money on your tax as you are salary sacrificing. Novated Leases Australia wide are gaining popularity because of their financial affordability.
Organising a Novated Lease is a simple and stress free procedure when you’re organised and prepared. Here are the five simple steps to ensuring you achieve novated lease success:
1. Contractual availability/ Employer abilities
Make sure your employment contract allows for salary sacrificing so you can begin to negotiate a novated lease with your boss Also, make sure your place of employment offers employee packages and benefits such as novated lease salary sacrificing as not all companies allow it.
2. Find an appropriate financer/dealership
Once you have established your eligibility to acquire a Novated Lease in Melbourne, or any other Australian city, you will need to embark on finding an objective third party car dealership or financer to partake in the all-important car financing role.
3. Decide on an appropriate vehicle
Just because you’re getting financial participation from a third party, does not mean your car is free. A lot of people get confused under the notion they’re not paying for the car under a novated lease because it’s their ‘work car’ however, you’re making the repayments so make sure you pick a car within your budget- not a Ferrari!
4. Confirm your chosen vehicle is affordable and financially bankable
Using a simple Novated Lease calculator is a great way to establish whether the car you have chosen to purchase is viable for your budget. You may pick a vehicle you think is appropriate, however with the payments being deducted from your wage, you need to ensure you can still budget for other things.
5. Ensure you make a budget
The best way to ensure you will be able to afford a novated lease is to look at your lifestyle and financial requirements. If you cannot afford to be missing a percentage from your fortnightly wages for your car repayment because you have other financial responsibilities, holding off on a novated lease agreement is a good idea.
Novated Leases are a fantastic and very viable way to purchase a new car. Full time Australian employees can find many financial benefits including tax reductions by entering into a novated lease agreement, however ensuring the purchase of your new car will not interfere with other financial obligations is important as you will have your fortnightly wages automatically deducted to make repayments. This is a fantastic way to ensure you’re never behind on your repayments, thus avoiding incurring late fees, however sticking to a budget is vital.