Novated Leasing; The smart route to your new car

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What are novated leases?

Quickly becoming well know all around Australia a Novated Lease is a salary packaging  product offered to employees by their employer. Its popularity is in that it can save you thousands per year on money saved from tax.
Novated Lease defined
Novated leasing is a straightforward and simple route to lease a vehicle and pay it off with your salary before tax. Lease repayments and car running expenses (excluding GST) are all bundled into one manageble monthly payment and these are taken from your pre-tax salary. In some cases getting a Novated Car Lease can actually move you into a lower tax band.

How do they work?  

A Novated Lease is a three way agreement between you as the employee, the employer and a financier. The monthly repayments are invoiced to your employer by the finacier. Once this is done your employer then takes the expense from your pre-tax salary.
This can lead to a reduction in the total amount of tax you pay and therefore increase your disposable income.

Along with the obvious lease repayments, vehicle operating costs including maintenance and servicing, insurance, rego and cards for fuel can also be bundled into a Novated Lease. The great part with this is that you won’t pay any GST on these car expenses or even on the purchase price thanks to your employer’s tax status.