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Why choose an Automotive Lease Packaging (ALP) novated Lease?
How does an ALP novated Lease work?
Who can do a novated lease?
What do I need to do for a novated lease?
What are the terms on a novated lease?
What if my employer uses a salary packaging company?
Do I earn enough income for a novated lease?
Can I choose my own car?
Can a used car be novated leased?
Can I purchase a privately owned used car?
Who places the purchase order for the car?
Can I do a novated lease on a car I own?
What does a novated lease include?
How many novated leases can I package?
What is Fringe Benefits Tax (FBT)?
How do I pay for my novated lease expenses?
How do I claim reimbursements?
How do I track Kilometers?
How do I work out my running cost budgets for my novated lease?
What is a residual value?
Who is responsible for the residual value?
What happens at the end of my lease?
What happens if I leave my employer?
Can I cancel my novated lease?
Why choose an Automotive Lease Packaging (ALP) novated Lease?
Simply, service and product offering!
You will deal with the industries' best people and finance packages, with features such as no payout penalties. Our technology is Australia’s best web based novated lease software with no frustrating call center every client has their own fleet consultant and team leader to communicate with.
How does an ALP novated Lease work?
Firstly, you must be in the market for a motor vehicle as this is not a tax saving scheme. A novated lease in many cases is a great tax effective way to drive and run your vehicle. ALP will firstly quote so you can assess if a novated lease is right for you then give you a choice of over ten different novated lease lenders to choose from.
After settlement of your new vehicle your employer deducts money from your salary on a regular cycle and remits to Automotive Lease Packaging.
We will provide you with a fuel and maintenance card for you to purchase your vehicles running and fuel expenses.
Who can do a novated lease?
Any fulltime employee working in Australia!
What do I need to do for a novated lease?
Firstly you need to be a full time employee working in Australia, in the market for a vehicle new or used. You will need to confirm with your employer if they are offering staff salary packaging. If you are the first to do a novated lease in your company Automotive Lease Packaging will work with you and your employer to set the process up correctly.
What are the terms on a novated lease?
You will have a choice of terms when considering a novated lease 1 to 5 year terms are available, please keep in mind the ATO set the standard residual guidelines on each term.
What if my employer uses a salary packaging company?
If your employer uses a salary packaging company generally they are employed to outsource the HR functions of your company’s payroll services. Many offer a one stop shop service for novated leasing and generally do a great job.
It is important to remember they cannot third hand enforce where you buy your car or which finance company you choose as long as it conforms to novated lease policy.
The problem with dealing with most salary packaging company is choice!
Generally, there is only one choice of finance company they can offer you. Also, they usually only sell novated leases and will generally do whatever it takes to put you into one.
Automotive Lease Packaging deals with Australia’s leading Salary Packaging companies on a daily basis for employers that outsource their HR services. Simply, instead of your employer being billed for your novated lease we will bill your salary packaging company.
Do I earn enough income for a novated lease?
Surprisingly, even though income levels are important with a novated lease, more important is the car purchase price and the amount of kilometers you travel each year. For example a low income earner travelling a lot of kilometers per year driving a moderate value car will have a better benefit then a high income earner driving low kilometers in an expensive car.
It is best not to discount yourself from considering a novated lease at least until consulting an Automotive Lease Packaging consultant on your personal scenario.
Can I choose my own car?
Yes, you can choose what car you wish to be Novated, though there are some restrictions on cars with load carrying capacities over 1 tonne that the ATO will not allow to be Leased. Your employer may also have restrictions on what cars you can Novate Lease.
You can choose from:
- A New Car
- A Used Car
- Doing a "Sale and Lease Back" on a car you already own
Can a used car be novated leased?
Yes, you can purchase a used car. There will be restrictions on the age of the car depending on what lender you use, typically you can purchase a used car up to 6 years old. The value of the car needs to be greater than $7,000.00
Can I purchase a privately owned used car?
Yes, but it is best to discuss with your consultant whether there is going to be a benefit to you by doing this. Sometimes it is better to purchase the same car through a car yard at a higher price. This is because there will be GST in the purchase of the car through a car yard (or GST registered business) that you do not finance in the lease, making the repayments cheaper than purchasing the car from a private individual.
Who places the purchase order for the car?
Being a Novated Lease, it is better that we order the car from the dealer for you. You are still free to get pricing from your preferred dealer, but by allowing us to order the car for you, you will be assured that if a better prices is possible for that model of car, we will use our buying power to get it for you.
Can I do a novated lease on a car I own?
Yes, this is called “Sales and Leaseback". Usually this is where you have already financed the car and want to convert it to a Novated Lease, but depending on what lender we use, you may also do this on a car you have paid cash for or owned outright for a number of years.
What does a novated lease include?
Automotive Lease Packaging offers finance only, novated lease or maintained novated lease which can include any or all of these:
- Fuel
- Tyre
- Insurance
- Registration
- Warranties
- Service and Maintenance
- Roadside Assist
How many novated leases can I package?
Most commonly, employees novate only one vehicle but subject to your employers novated lease policy you can novate lease more than one vehicle.
What is Fringe Benefits Tax (FBT)?
Fringe benefits tax is a tax paid on certain benefits you provide to employees. FBT is separate from income tax and is based on the taxable value of the various fringe benefits you provide.
Under this method, the taxable value of the car fringe benefit is a percentage of the car’s cost price and is calculated using the following formula:
((A x B x C) - E) / D
Where:
- = the base value of the car
- = the statutory percentage
- = the number of days in the FBT year when the car was used or available for private use of employees
- = the number of days in the FBT year
- = the employee contribution
Statutory Percentage
The statutory percentage depends on the total kilometres the car travels, as follows:
| Total kilometres travelled during the FBT year |
Statutory Percentage Existing Contracts |
||||
|---|---|---|---|---|---|
Existing Contracts |
From 10/05/2011 |
From 01/04/2012 |
From 01/04/2013 |
From 01/04/2014 |
|
| Less than 15,000 kms | 26% | 20% | 20% | 20% | 20% |
| 15,000 to 24,999 kms | 20% | 20% | 20% | 20% | 20% |
| 25,000 to 40,000 kms | 11% | 14% | 17% | 20% | 20% |
| Over 40,000 kms | 7% | 10% | 13% | 17% | 20% |
How do I pay for my novated lease expenses?
Automotive Lease Packaging will invoice your employer or salary packaging company on a regular cycle (weekly, fortnightly or monthly) and hold your money in your novated lease account. You will be issued with a fuel and or maintenance card (BP, Caltex Ampol or Motorpass) to pay for all your expenses. Insurance and Registration is either paid in-house monthly or on annual request via driver reimbursement forms. Some clients pay cash for their expenses and send in the receipts for reimbursement to their nominated account.
How do I claim reimbursements?
Included in your driver starters pack and on this website are reimbursement forms for you to complete and fax or email in with a copy of your receipt, we will reimburse you once your account balance has been checked and the claim logged (usual time 3 business days).
How do I track Kilometers?
Managing your kilometers is ultimately the driver’s responsibility and it is important to try and stay with- in your nominated kilometer bands as this could affect your FBT and your employee contributions. Automotive Lease Packaging fuel cards request you enter your odometer when you fill your car for fuel. We send you monthly driver reports tracking your kilometers.
How do I work out my running cost budgets for my novated lease?
Automotive Lease Packaging quotes pre calculate your vehicles running costs. It is important to note you can change these to suite changes in your driving usage any time during your lease.
What is a residual value?
The residual value on a lease is the amount to pay in order to purchase the car at the end of the lease term. The minimum values for residual values are set by the ATO and are meant to roughly reflect the value of the car at the end of the term. ATO minimum residual values are often described as a percentage of the amount financed. Minimum residual values as per ATO guidelines are determined by the term of the lease:
| Lease Term | Minimum Residual |
|---|---|
| 12 Months | 65.63% of the amount financed |
| 24 Months | 56.25% |
| 36 Months | 46.88% |
| 48 Months | 37.50% |
| 60 Months | 28.13% |
Who is responsible for the residual value?
The person taking out the Novated lease is responsible for the residual value of the car.
What happens at the end of my lease?
At end of the lease a client generally has 3 options
- Purchase the car by paying the residual value to the lender
- Continue to lease the car by re-financing the residual value
- Selling/trading in the car (the proceeds of which go to paying out the residual value) and moving on to a new car
What happens if I leave my employer?
If you leave your employer you take the car and the lease payments with you. Your employer ceases to be responsible for the repayments when you leave. Your deed of Novation will be canceled and you will be sent a direct debit form so that the lease payments can be debited directly from your account. If you were not paying the GST on the lease payments whilst with your employer you will have to pay it now.
If you start a job with a new employer and they agree to novate your lease, a new deed of novation will be organized to be signed by you and your new employer; they will then make the repayments for you and deduct this from your salary.
Can I cancel my novated lease?
You can cancel your Novated lease at any time; if you wish to keep the car, you will need to cancel the Deed of Novation and have the payments direct debited from your account.
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