Novated leasing (also known as salary sacrificing) is a way for you to lease your vehicle through your employer. While you are with the employer, they make the lease repayments on your behalf using your pre-tax (or a mixture of pre and post-tax) dollars. Here is a quick overview of the benefits for an employee:
Choice Of Vehicle
Unlike when work provides you with a vehicle, a novated lease gives you the opportunity to choose the car you always wanted, subject to your finance application of course.
The Vehicle Goes With You
As the lease is in your name, if you leave your employer (for any reason) the novation stops and you are left with a lease in your name and your car. From there you can make the payments yourself, pay the lease out or even re-novate with another employer.
By making the repayments using either just pre-tax income or a mixture of pre and post-tax, you can greatly reduce your income tax payable. This is because the bulk of the finance payments and running costs come out of your salary before your income tax is paid, thus reducing the tax payable if you didn’t have a lease.
Each lease is structured to include all of the scheduled running costs in the single monthly repayment. This means that, for the life of the lease, you should not have to pay any scheduled running cost as we will pay this for you.
When a novated lease is financed, it is done so at the price of the vehicle excluding GST, saving you 10% upfront. As the lease progresses, no GST is paid on any of the running costs either saving you even more.
Discounted Running Costs
Novated Leasing providers generally use their buying power to negotiate nationwide discounts on many items that go towards keeping you on the road, such as servicing, tyres and fuel – which are passed back to you.