I am a South Australian Government employee – What are my Novated Lease options?
There is very little information on choice when establishing a Novated Lease for SA Government Employees. Most employees believe they are required to you the sole Salary Packaging provider chosen to administer the SA Government contract. This is not correct. By understanding the difference between a Novated Lease for SA Government employees and the Salary Packaging administration of that Novated lease, employees could unlock a far more affordable benefit.
Novated Lease Choice
All SA Government employees have a choice when establishing their Novated Lease. Employees could save thousands of dollars more every year by understanding the difference between a “Self Managed Lease” and a “Managed Lease” provided by Maxxia.
A number of years ago the SA Government reduced the choice of Salary Packaging Administrators from three down to just a single provider (Maxxia). However to ensure that all employees have choice over where they find a car, finance that car and insure that car they enforced the need for what has been termed a “Self Managed Lease”. This term sounds scary and daunting, however it is simple and there are no technical or taxation savings differences. The biggest difference is in the amount you could save through transparent competition. Vehicle Solutions Australia have been providing SA Government employees with lower vehicle prices, lower finance payments and no unnecessary insurance premiums for over 7 years. By getting a second quote and understanding the differences in the quotes will save you thousands a year.
Firstly it starts with the best vehicle price.
A competitive Novated lease starts with the best vehicle price. Every vehicle manufacture (such as Toyota or Mazda) have levels of discount available to companies that purchase a lot of vehicle (leasing companies, fleet buyers and online vehicle buying sites). One of the great opportunities in a novated lease is the ability to take advantage of these discounts. Vehicle Solutions established Motorbuys which is Australia’s only fully automated online vehicle buying website. By automated we mean that when you request pricing on a vehicle the computer system sends your request to every dealership in the region/s chosen (anonymously) and the dealership pricing responses are sent directly back to you (anonymously). Only then do you have a transparent competitive vehicle price that can be used to complete the Novated Leasing quotes.
A more competitive Novated Lease for SA Government employees.
The lease (finance) payments are usually the most expensive part of Salary Packaging a car. To make your lease payments as affordable as possible understand the the following factors that contribute to the payments. 1. Vehicle price; higher the price the more expensive the payments. The residual value; the higher the residual the lower the payments but the more you need to payout at the end. The inclusions in the finance such as insurances. With the right insurance and vehicle choice you DO NOT need insurances such as GAP insurance, extended warranties, Tyre and Wheel, Minor dint, Roadside assist etc… These insurances simply increase the amount financed and thus the payments.
Agree of the Running Costs
The number of KM’s you travel and the type of vehicle chosen will effect the runnings costs such as servicing, fuel and tyres. Firstly average your weekly km’s traveled, this will give you a good spread of weekday travel as well as weekend driving. Times this figure by 52 weeks. Then factor in any normal holiday trips and you will have a very good estimate. This will then allow for a more accurate estimate to be made on the running costs. We will always use the manufactures capped price services where applicable and tyre data listed on major vehicle review sites. Fuel is estimated from the vehicle average litres per 100 kms and a cost of $1.50. This allows for a bit of buffer between different drivers and driving conditions (freeway vs town driving).
Then you will have a very competitive and accurate Novated Lease quote.
What is the difference between a Novated Lease for Sa Government Employees and Salary Packaging. Salary Packaging is simply the administration of the Novated Lease. Prior to the administration all SA Government employees have the right to find a more competitive vehicle price, insurance, runnings costs and finance (Novated Lease). Vehicle Solutions Australia not only provide a more affordable novated lease but also complete the SA Government required paperwork to establish the Salary Package with Maxxia. SA Government allow this choice through a “Self Managed Lease”.
What is the “Self Managed Lease” option.
We have been providing this option to SA Government employees for over 7 years and our leases comply with all SA Government requirements. The only difference between a Managed and Self Managed option is the choice of one fuel card (BP), you are required to claim your service registration and insurance payments (for most people this is three claims per year). Using Maxxia’s App you will have your claim paid within 24-48 hrs. The bonus of a Self Managed lease is the lower cost ($180 per year). To have a managed lease where these three payments are made by Maxxia you will pay an extra $240 per year. For most people this is the cost of a car service ever year.
The most important part of our service of providing a Novated Lease for SA Government employees is that we are local and can sit down over a coffee and explain the service in detail. With our 7 years experience we know how the system works, we produce all of the paperwork, we know who in SA Government can authorise the paperwork and can have you driving your car within a few days not weeks.
A quick phone call to our office (08 8338 4427 or 1300 990 880) on Glen Osmond Rd could save you thousands a year.
A great place to start is our online calculator. Choose SA Government in the employer list and see how much you will save.