Novated Leasing is a Finance Lease between the financier and the employee, which is then ‘novated’ to the employer. The employee chooses the vehicle and the employer pays the employees instalment obligations from the employee’s salary.
If the employee leaves their employer, the employee keeps the vehicle, including the instalment obligations, or arranges for their new employer to take over the instalment payment obligations.
This is a great way in which you can obtain a vehicle PLUS all its running costs but packaged through your employer as a ‘salary sacrifice’. A portion is paid from your pre-tax salary, unlocking the power of your salary and turning your tax to your advantage.
As each lease is in the name of the employee, there are no fees or costs for the employer. This includes early termination, or lease changes. The monthly payment for each novated lease is passed to the employer, meaning you can claim these as a direct expense on the business and any deductions that attracts.
Novated Leasing Features
A car is leased in your name and running costs such as fuel, insurance and maintenance are all included in a single lease repayment, paid for using a combination of your pre and post-tax salary. This means you could reduce your taxable income and pay less tax.
If the employee leaves their job, they keep the vehicle and subsequently take over the instalment obligations. The lease and vehicle move with you – providing your new employer agrees.
Save money on your new car
We can help you find the best price on your new car with our nationwide fleet discounts and preferred dealer network. Plus, with a novated lease you don’t pay GST on the purchase price of your new car, which could save you thousands up front
With a novated lease, all your finance and running costs are budgeted for, with funds set aside from your pre and post-tax salary each pay period. And, if you don’t spend your budget, you can simply request to have the money returned to you. Big savings on all types of vehicles, discounted fuel cards, over 10,000 suppliers for maintenance and repairs, competitive insurance options and 24/7 Roadside assistance.
The Lender purchases the vehicle on behalf of the customer, who then leases the asset back from the Lender and pays a fixed monthly lease rental for the term of the lease. At the end of your lease period, normally 4-5 years, you have the option to lease a new car, re-lease your existing car or purchase the car outright
For every after tax dollar that you contribute (these are the payments made from your post-tax salary), you reduce the amount of FBT you need to pay by exactly the same amount. This is because your employer takes a contribution from your salary and provides you with a car for both business and personal use. This benefit attracts Fringe Benefit Tax (FBT). The amount of tax you need to pay is a tax office formula based on the value of your car. * seek advice from your Accountant
Important Factors to Keep in Mind
Just as you would with a standard loan, it’s important to work out how much you can afford to borrow on your loan. Work out how much you need to borrow and create a budget to work out how much you can afford to pay back each month.
Our application process is quick & easy. G-Force Finance Solutions has national coverage, systems and advisers that can get your application approved fast. If you haven’t yet found the right vehicle or asset, that’s ok as we will help organise pre-approval, knowing exactly what you can afford, so you can find the right asset with peace of mind.
We are ready when you are ready to make the move – your advisor will prepare the paperwork, liaise with the lenders every step of the way to the settlement.
Our advisers will discuss your personal circumstances with you, such as your income, outgoings, future and savings, together with the end to end process and steps involved – we seek to understand your short, medium and long term goals.
Visit our Loan Calculators today and take the next step by clicking the “Quick Quote” Button and our finance advisers will then get to work on sourcing you a tailor-made package from our trusted panel of lenders and will work tirelessly to get you the right solution.