Why You Should Consider A Novated Lease Deal

Novated leasing is a tax-effective way of driving a new vehicle. Compared to getting a car loan from a money lending institution, novated leasing is a better option and comes with many benefits. Below are some facts why you should opt for a novated lease over the conventional car loans.

Reduce Your Taxable Income

With novated leasing, the agreed repayment premiums are deducted from your salary before tax, and this reduces your overall taxable income. It also means that you need not wait for a whole financial year to claim back your tax in your income tax return. Also, through novated leasing, you take more money home as it lowers your taxable income.

Your Employer Makes the Repayments

You don’t need to worry about direct debit payments coming from your bank accounts and making sure that there are enough funds available when your repayments are due. Your employer makes the repayments to the financer, before paying your salary, so you never have to worry if the payments are made or not as it is not your responsibility.

Save On GST

As the car financier calculates your rental payments on the GST exclusive amount of the car, you will save on this amount of GST. There will be GST added to your repayments, and your employer may have the ability to claim this before making your lease repayment, saving you on GST on your loan repayment too, which also include the running costs for the vehicle, which could mean GST savings on tyres, fuel, insurances, maintenance, etc.

Convenience

Novated leasing deals give you the option to add running costs and other costs to your lease package. Itcan offer convenience since all your vehicle running costs are included in your lease repayment. Other charges can be added to your novated leasing package include any ongoing insurances, maintenance and servicing costs, road assistance, fuel, tyres, and annual registration costs.

Flexibility

Unlike using if a company car, if you decide to quit, you still take the car with you and continue to make your lease repayments. It is possible to move the novation agreement to your new employer and keep enjoying the car. With novated leasedeals you are also able to select your dream car, one that you can afford with your current salary.

It is better compared to driving a company car which is not your choice. As you can see, there are many reasons why you should consider such an arrangement. All you need is know what you want (your dream car) and use a novated calculator to calculate the savings and total costs. If everything adds up, you can then contact a novated leasing company and initiate the whole process.