What is the Difference between a Novated Lease and Salary Packaging
What is the difference between a Novated Lease and Salary Packaging?
Novated Lease and Salary Packaging, by understanding the difference between a Novated Leasing and Salary Packaging will save you thousands. The reason for this is simple. The explanation creates choice and choice creates competition and a more competitive finance payment saves you money.
Every employer that offers the benefit of a Novated Lease and Salary Packaging a car needs to firstly create a process to manage; the payroll deductions, GST claims, FBT reporting and vehicle expense payments. This process is called Salary Packaging. In a vast majority of cases this process is outsourced to a third party provider.
The Salary Packaging Provider is also the first point of call to answer any questions and assist to make the process as easy and simple as possible. Part of answering questions and proving advice is to provide a comprehensive quote on exactly what a particular car will cost an employee from their salary. To be able to do this the Provider needs to get a vehicle price and then calculate the finance (lease) and all other vehicle running costs associated with the car. This finance component is called the Novated Lease. It is very important to understand that every employee SHOULD have the right to source their own competitive Novated Lease. However most providers either don’t advertise this fact or worst still convince the employer to make them the sole provider for both the Novated Lease and the Salary Packaging process. This removes choice and any competitive finance environment.
What is a Novated Lease
A Novated lease is made up of a Finance Lease and a Novation Deed. By having choice of financier, the employee can investigate competitive options. However the most Salary Packages require the lease to be established in a particular way with a employer specific Novation Deed attached. Vehicle Solutions have been providing this competitive service to some of Australia’s largest government employers for over 10 years. In this time we have established communication points with employers and providers across Australia.
If you would like to compare your loan repayments to a novated lease go to our Novated lease calculator or call us on 1300 990 880.
If you haven’t found your new car yet but know what you want try our online new car buying site www.motorbuys.com.au. Motorbuys is designed so that you can choose the exact car in a few simple clicks. Motorbuys is the only site that allows you to choose the exact colour and accessories so that dealers can provide an accurate quote, so you can make a more informed decision.
To obtain a pre-approval on your lease click HERE