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Why a Novated Lease can work for you
A lot of people are unaware of the benefits of entering into a novated lease, which is primarily because they are unfamiliar with what it actually is. Simply put, a novated lease is an agreement between three participants: a full time Australian employee, their employer and an objective third party financer.
A Novated Lease is an extremely viable and affordable way for an employee to acquire a new car, with significant financial benefits for all parties involved. If you haven’t got the immediate finances available to purchase a new car, you can still do so through your workplace should their policy allow it.
A novated lease allows your employer to acquire the car through the financer on your behalf, then you make regular repayments to your employer via automatic deductions from your wages. Entering into a novated lease in Australia is a secure way to finance a new vehicle, while still maintaining a regular wage packet. The benefits of this car finance scheme are varied; however all are very healthy financial wins for all parties.
A novated lease can work for you by not only resulting in a new vehicle, but you are also guaranteed the security of your finances by having the repayments automatically deducted from you wage. This means no risk of falling behind on your car payments which may result in repossession. The car is 100% yours, despite your employer purchasing it, and you will be making all the payments so at the end of the lease period you have a vehicle in your own name.
A good way to calculate how much your regular repayments will be is to use a novated lease calculator. A novated lease calculator can measure how much you earn against the cost of the vehicle to determine a percentage total to be deducted from your wages. This is a great way for people to work out how they will need to budget for the type of car they wish to purchase through their novated lease. By searching for the vehicle or model you have in mind you’re able to work out how much it will cost and how much you’ll be missing from your wages each pay period. Australia has a very fair system when it comes to vehicle finance through novated leasing, meaning it is possible for employees to acquire a new car that they otherwise may not have been able to afford.
Additionally, a novated lease sees you pay less overall tax on your wages. By deducting the car repayments prior to taxable income being received, the employee will have a lower taxable income rate meaning they pay less tax over the financial year/s across the repayment lease period. Essentially, a novated car can work for you by supplying you with the finances needed to purchase a car, guaranteed security of the repayments on that car as well as a lower financial tax payment each financial year that the novated lease is valid.
Novated leases are a fantastic way for Australian employees to acquire new cars without the financial burden associated with bank loans and other financial loans. If you need more information on what is a novated lease and novated lease explained we can provide you with all the info you need.
We are the experts in Australia for Ford Novated Leasing, Holden Novated Leasing and Toyota Novated Leasing. Give us a call today and one of our friendly staff will assist you.