In today’s world, most people need to drive a car to get around, and it’s no secret just how quickly the associated costs add up. A vehicle novated lease could be the perfect solution that’ll save you both money and hassle!
Vehicle novated leases can sound confusing, but once you understand how they work, you’ll be able to see the benefits immediately, not only for convenience but financially as well. A lot of people are unsure if a vehicle novated lease is for them, the answer is if you like saving money then it sure is!
Car Depreciation
Everybody knows as soon as you drive a new car out of the showroom, you would instantly lose thousands if you attempted to resell it straight away. Cars depreciate exceptionally rapidly, so a short-term vehicle novated lease can be very appealing.
Usually, a vehicle novated lease ranges from two to five years that leaves options to upgrade or buy the car outright if you find it’s the right fit for you. New cars after only a few years lose their value and leave you with the hassle of selling privately or trading into a dealer for an even more significant loss.
Deduct from Taxable Income
A vehicle novated lease is an agreement between you, your employer and your fleet provider. The company you work for agrees to front the monthly payments for the car novated contract directly from your salary, pre-tax!
What this means is your taxable income is reduced, effectively providing you with an entirely tax-deductible vehicle for the duration of the car novated lease. Vehicle novated leases are a tax-effective strategy that gets you more out of your salary.
On-Road Costs Are Calculated and Included
A vehicle novated lease not only acquires you a drivable car but it also incorporates all your on-road costs, including fuel. We apply all these calculations to your salary pre-tax, which saves you from paying GST.
You can estimate your fuel budget by multiplying the average litres per 100 km your make of car uses by your annual km travelled by the average fuel cost per litre. Figuring in all these on-road costs into your vehicle novated lease reduces your taxable income further and provides you with critical annual savings.
Registration and insurance renewals are estimated based on the type of vehicle you’ve chosen for you vehicle novated lease, so it’s that easy to stay on the road and save. It’s often the case for drivers to get lazy and neglect to service their car every 10,000 to 15,000 km, but with a vehicle novated lease all these costs are included in the premium.
If you think that a vehicle novated lease would have a significant effect on your life and finances, then have a look at our novated lease calculator to see your eligibility and see just how much you could save!
