Novated Lease
This novated lease article was written by a ghost writter for me, its not bad but I havent published this novated lease article on my website.
What is a novated lease?
A novated lease is a method of automobile financing where the payment arrangements are made between the person wanting a car, the automobile dealer and your employer. Once you choose a car, you make financing arrangements including the amount of monthly repayment and the length of the lease. When these details are finalized, the employer is assigned the duty of collecting the repayment money from your salary, before taxes. This effectively reduces your taxable income.
If you change jobs before the end of the lease, the lease moves with you to the new employment. Once you reach the end of the leasing period, you have several choices. You can purchase the car for a predetermined amount, owning it outright, you can sell the car, paying off the residual amount owed and keeping any profit, or you can trade the car in.
What are the advantages of a novated lease?
There are several reasons why novated leases make a good choice for many people. The most obvious is the reduction of your taxable income that comes from making a monthly lease payment with your pre- tax income. Another benefit to the novated lease is the option of investing in a fully maintained novated lease. This option means that the leasing company will take care of all maintenance on the vehicle for the life of the lease. The cost of this service is factored into your monthly payment, so there is no need to make special arrangements for car insurance, replacing tyres, or registering the vehicle. This is a great time saver for the busy individual.
Is a novated lease right for you?
Of course, a novated leasing is not for everyone. To qualify for a novated lease the employee must be on wages and the employer must offer a salary package. The novated lease is considered part of a salary package. Employees receive the benefit of a lower taxable income and the employer saves money on what would be the purchase of company vehicles. Because of the benefits to both employee and employer, novated leases are a popular component of many salary packages.
It is important to consider repayment terms when thinking of taking on a novated lease. If you are unsure how long you plan to stay with your present employer, consider how you plan to repay the lease. Novated leases are portable, and can follow you from one job to another, but what happens if you spend time unemployed? And, not all companies offer salary packages. If you are considering switching careers, it is important to understand the repercussions before committing to a novated lease.
Discussing the benefits of novated leasing with your employer
If you are interested in novated leasing, and your company does not offer that option, take some time to educate them on the benefits they will receive from novated leasing. Companies that provide novated leasing as part of their salary package reduce their overhead and inventory by removing themselves from the process of providing company vehicles. There is also much less work on the bookkeeping end of the office with novated leasing. The financing company lets the employer know the monthly lease payment and the bookkeeping department withdrawals it from the employees’ pay check. The amount may differ from employee to employee, depending on whether they decided on a fully maintained lease or not, as well as the type of vehicle and term of lease they choose, but each employee will have a fixed monthly amount they will pay. The novated lease company will set up the payment and make all the financing arrangements for the employer.
Other Finance Options
Platinum Car Loans offers you all the right car financing options, these include Novated Lease or Novated Leasing, Commercial Hire Purchase, Chattel Mortgage, Car Lease, Finance Lease, Operating Lease and all Consumer Secured Car Loans.
